On 20 March 2017, Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA delivered a speech on insurance supervision at the PRA.
Mr Woods commented that a precondition to the success of the UK’s world leading insurance sector is world-class insurance supervision, which is what the PRA aims to deliver.
In his speech Mr Woods covered various topics including:
• a review of Solvency II and suggested changes to Solvency II Matching Adjustment and Risk Margin;
• a rejection of the idea that the PRA has gold-plated Solvency II;
• a review of the PRA’s approach to insurance supervision including its parliamentary objectives of delivering safety and soundness of insurers and securing an appropriate degree of policyholder protection;
• a consideration of the PRA’s secondary objective of facilitating effective competition and the work the PRA is currently doing in this area;
• questions about how much protection the PRA should seek to deliver, for which sorts of policyholders, and with what confidence; and
• comments of the Bank of England’s Independent Evaluation Office’s findings that the PRA could do more to explain what it means by “policyholder protection”. Mr Woods expresses the view that policyholder protection is about making sure that insurance companies are there to help when disaster.