London underwriters and brokers back call for regulatory reforms
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The chief executive of the London Market Group, a market-wide body representing underwriters and brokers in London, has expressed support for the Regulatory Reform Group’s call for change in the UK regulatory system.
In a report published on Tuesday, the RRG raised several concerns with the system, arguing there are issues in how regulators interact with industry.
Commenting on the report, Caroline Wagstaff said: “We have been advocating strongly and consistently for greater accountability of regulators through our ongoing work on the Financial Services and Markets Bill.”
She said that the “Treasury should be setting out specific metrics to hold [regulators] accountable, that the regulators should be reporting consistently and that parliament should be marking their homework”.
The report highlighted a case study where the government and the Prudential Regulation Authority supported the creation of a new market for insurance-linked securities in the UK in 2018 but the approach used to review applications was “not fit for purpose”, leading to extended timescales and extensive data and document requests.
As a result, only five ILS vehicles were created and the “sluggish approval processes and uncertainty” meant that financial benefits were not realised, said the document.
Wagstaff concluded: “The report’s inclusion of a case study on the UK ILS market highlights what happens when rules and behaviours are not in sync.”
In February, City minister Andrew Griffith said regulations should be eased as part of the Solvency UK package, the country’s reforms of Solvency II.
Speaking at the Association of British Insurers annual conference, he said: “We are consciously trying to embrace the concept of people understanding and accepting risk, and you can't protect and litigate against every single risk. You have to have a financial and a political system that makes peace with that.”
Do insurers need a new regulatory landscape in the UK?
