In a speech recently published by the Bank of England, Paul Fisher, the PRA’s Deputy Head and Executive Director of Supervision stated that the successful implementation of Solvency II is a “top priority” for both the PRA and the Bank of England.

In the speech, the subject of which was regulation and the future of the insurance industry, Mr Fisher also noted that the UK insurance industry is in a good position as a result of the UK’s individual capital adequacy standards (ICAS) framework and that the PRA will accordingly not be using Solvency II as an opportunity to raise capital requirements across the board.

The speech also contains interesting comment upon:

  • The PRA’s intended approach as regards the implementation of Solvency II, which is not to “gold plate” and to continue to be proportionate in its supervision of firms.
  • The link between firms’ capital and risk management.
  • The introduction of the prudent person principle and the associated shift from quantitative to qualitative rules.
  • The role of non-executive directors.

The full text of the speech can be found at: http://www.bankofengland.co.uk/publications/Documents/speeches/2015/speech790.pdf.