Earlier this month, the Financial Services Authority (FSA) and the Bank of England jointly published a paper setting out the approach which the Prudential Regulation Authority (PRA) (which is to take over the FSA’s function as insurance supervisor in the UK) intends to take on insurance supervision. Helpfully, the paper confirms that the PRA will recognise that insurers’ liabilities and risks differ from those faced by banks and acknowledges that traditional insurers do not tend to endanger financial stability. The paper confirms that risk prevention will be key to the PRA’s approach.