Sarah Wilson, Director and Insurance Sector Leader at the FSA has given a speech on the FSA's view of life insurance. She acknowledged that the insurance sector was coming under increased attention as a result of the turbulence in financial markets but stressed that it was stronger and better placed to deal with the stressed market conditions than during the last bear market of 2003. In particular, she said that the enhanced capital requirement for general insurers, the Individual Capital Adequacy Standards (ICAS) regime and improved governance had helped achieve this resilience.
Ms Wilson also said insurers had improved their understanding and management of risk but needed to be aware of the impact of changes in the market and how these would affect their businesses going forward. On Solvency II, she said the new requirements for capitalisation would encourage further improvements in risk management and pointed out that UK firms were already well advanced in their preparations for Solvency II.
Finally, she said treating customers fairly (TCF) continued to be a top priority for the FSA and that by December firms should be able to demonstrate that they were consistently treating their customers fairly. (See our recent blogs on TCF, please click here and here.)
To see the full speech, please click here.