Current regulatory developments of curiosity to insurers and their intermediaries. See additionally our Basic regulatory information within the Associated Supplies hyperlinks.
- COVID-19: FCA replace on enterprise interruption insurance coverage check case
- COVID-19: FCA reminds insurance coverage companies to evaluate worth of insurance coverage merchandise
- COVID-19: FCA confirms extra steering for insurance coverage and premium finance companies on prospects in monetary problem
- Lloyd’s & London market intermediaries and managing basic brokers: FCA Expensive CEO letter
- Solvency II Evaluate second time spherical
- Solvency II: EEA Joint Committee Resolution incorporating into EEA Settlement Implementing Regulation on calculation of technical provisions and fundamental personal funds
COVID-19: FCA replace on enterprise interruption insurance coverage check case
The UK Monetary Conduct Authority (FCA) has up to date its webpage on its enterprise interruption insurance coverage check case to verify that an enchantment of the case might be heard by the Supreme Court docket. The enchantment might be heard by way of video hyperlink ranging from 16 November and is predicted to final 4 days.
Royal & Solar Alliance Insurance coverage Plc has confirmed it is not going to be interesting the Excessive Court docket’s judgment in respect of the RSA4 wording, and Hospitality Insurance coverage Group Motion has confirmed that it’ll not be searching for to intervene within the Supreme Court docket enchantment.
COVID-19: FCA reminds insurance coverage companies to evaluate worth of insurance coverage merchandise
On 30 October 2020, the FCA revealed a statement reminding insurance coverage companies and intermediaries to overview the worth of their merchandise within the gentle of the distinctive circumstances arising from COVID-19, and determine what motion to take by three December 2020.
The FCA additionally confirms that it has reviewed its steering and doesn’t intend to replace it. Nevertheless, the results of COVID-19 might proceed to have an effect on the worth of insurance coverage merchandise and trigger hurt to prospects, so the FCA asks companies to observe this danger as a part of their regular product governance processes. This consists of the continuing monitoring and common overview of insurance coverage merchandise and appearing the place essential.
COVID-19: FCA confirms extra steering for insurance coverage and premium finance companies on prospects in monetary problem
The FCA has revealed finalised guidance on how companies ought to proceed to assist prospects who maintain insurance coverage and premium finance merchandise and could also be going through monetary problem, as a result of COVID-19 pandemic, after 31 October 2020. The brand new steering dietary supplements the FCA’s earlier August 2020 steering, and descriptions the tailor-made assist companies ought to present to customers who’ve already had a cost deferral and people newly in monetary problem as a consequence of modified circumstances.
The FCA has revealed a suggestions assertion, FS20/16, summarising suggestions obtained to its session on this new steering, along with the FCA’s response. Within the gentle of suggestions, the FCA has made one change to its steering. This pertains to an instance the place a agency would possibly contravene Precept 6 in relation to coping with prospects in default or in arrears.
The steering got here into pressure on 1 November 2020. Though the August steering expired on 31 October 2020, sure provisions regarding prospects granted cost deferrals underneath the steering that got here to an finish after 31 October 2020, will stay in pressure.
Lloyd’s & London market intermediaries and managing basic brokers: FCA Expensive CEO letter
The FCA has despatched a Dear CEO letter to Lloyd’s & London market intermediaries (LLMI) and managing basic brokers. The letter units out the FCA’s view of the important thing dangers of hurt to prospects or the markets companies function in, that are posed by companies within the FCA’s LLMI portfolio, and descriptions the FCA’s expectations.
The FCA states that companies’ enterprise fashions ought to stay financially resilient throughout this troublesome financial interval and will proceed to fulfill the regulatory prudential necessities and threshold circumstances.
The FCA expects companies to contemplate the Wholesale Insurance coverage Dealer Market Examine (revealed in February 2020) and take appropriate steps to make sure that considerations raised within the examine are addressed. Areas raised on this examine embody conflicts of curiosity emanating from remuneration practices and the necessity to modernise the market. Companies must innovate to create wholesome competitors, environment friendly distribution chains, good claims companies and higher use of information. Of equal significance is a wholesome market tradition through which non-financial misconduct is diminished and variety and inclusion improved.
In its letter, the FCA identifies 4 frequent themes it needs to prioritise. These are explored in additional element within the physique of the letter. The themes are:
- monetary resilience and orderly wind-down;
- ineffective governance and oversight of companies;
- tradition and non-financial misconduct; and
- enterprise fashions which give poor oversight of distribution chains.
Different areas of danger recognized by the FCA embody the hardening insurance coverage market, publicity to cyber dangers and the tip of the Brexit transition interval.
The supervision technique within the letter covers the interval to November 2021.
Solvency II Evaluate second time spherical
Earlier this summer time, the UK authorities introduced that it will overview the influence of the Solvency II regime on the UK insurance coverage trade. On 19 October 2020, HM Treasury revealed a Name for Proof. That is the primary stage of the overview. Learn our separate briefing here.
Solvency II: EEA Joint Committee Resolution incorporating into EEA Settlement Implementing Regulation on calculation of technical provisions and fundamental personal funds
Decision 111/2018 of the EEA Joint Committee has been revealed within the Official Journal of the European Union. The Resolution considerations incorporating Fee Implementing Regulation (EU) 2018/165 laying down technical info for the calculation of technical provisions and fundamental personal funds for reporting with reference dates from 31 December 2017 till 30 March 2018 underneath the Solvency II Directive into Annex IX (Monetary Providers) to the EEA Settlement.
The Resolution was made on 31 Might 2018. Its date of entry into pressure is specified as 1 June 2018, supplied that every one notifications underneath Article 103(1) of the EEA Settlement have been made.
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