On 4 April, Chris Moulder (Director of General Insurance, Bank of England) gave a speech to the iNED Forum on current regulatory issues for insurers and the PRA’s expectations of firms in the current soft market conditions.
The speech focussed on changes to regulation following the implementation of Solvency II and the implementation of the senior insurance managers regime (SIMR) and corporate governance. Mr Moulder noted that the PRA’s fundamental objectives as a regulator and approach to supervision “remain unaltered” and that both regulators and directors should not lose sight of the basic principles of a sustainable insurance section, namely “disciplined underwriting, appropriate reserve setting and robust risk and capital management.”
Mr Moulder encouraged boards to ensure the correct governance of any internal model changes and to ensure that the ORSA documentation is effective, highlighting key messages and metrics and in an accessible format. He also emphasised the PRA’s expectation on the independent governance of significant PRA-regulated subsidiaries as set out in the recent “Corporate Governance – Board Responsibilities” Supervisory Statement (SS5/16)1.