Carney speaks on insurers' reform: Mark Carney, BoE's governor, has addressed the Institute and Faculty of Actuaries on reforms to the insurance industry, including re-introduction of:
- capital standards for insurers, also noting that, although an internal model can be a better fit to a firm's risk profile than a standard formula, BoE will not hesitate to withhold approval of inadequate or opaque models;
- accountability of key personnel at insurers, which will include creating a senior management regime similar to that currently being implemented for banks (although without including a reverse of the burden of proof now applying on senior bank personnel); and
- global standards for globally systemic insurers.
(Source: Putting the Right Ideas into Practice)
PRA finalises rules on LTI caps: PRA has published the policy statement containing the final rules implementing the loan to income (LTI) cap on mortgage lending. Two changes have been made to the draft proposed rules:
- the de minimis threshold is either £100 million in value or 300 in number of relevant regulated mortgage contracts each year; and
- it is possible to allocate the LTI limit across a whole group.
FCA has also published its guidance for the firms it supervises. The changes are consistent with those introduced by the PRA policy statement. The rules apply from 1 October. (Source: PRA Policy Statement on LTI Ratios and FCA Guidance on LTI Ratios)
PRA gives whistleblowing guidance: PRA has published guidance on its approach to whistleblowing, and on what it expects from whistleblowers and how it will treat them. (Source: PRA Gives Whistleblowing Guidance)