The PRA has published a consultation1 containing rules which, if adopted, will require insurers to take steps to encourage board diversity. However, the question which springs to mind on reading the proposals is: should the proposals have gone further to improve diversity in an industry with a reputation for being dominated by white, middle-class men?
The PRA’s proposals are contained in a consultation paper which sets out various changes to the Senior Insurance Managers Regime (SIMR). If the proposals are adopted, all Solvency II firms and large non-Directive firms will be required to implement a policy which promotes diversity among board members. However, the PRA has not provided any guidance on what the diversity policy should contain, so it will be leaving insurers with significant discretion.
As the PRA is proposing to adopt for insurers a requirement which has been in place for banks and building societies for over two years, we might have expected the PRA to have analysed the diversity policies which banks and building societies have adopted in that time, and explained whether these policies have helped to improve board diversity in practice.
If the requirement has not seen positive results, even small, within two years, it is difficult to shake the feeling that the PRA is missing a great opportunity to impose a stronger requirement for insurers to take action to improve diversity.