With its newly acquired powers the FSA is to build up a new team of experts comprising accountants and retired City executives to make the new watchdog more proactive in uncovering regulatory failures in the insurance sector.
John Tiner, FSA managing director of consumer, investment and insurance matters, is to lead the ‘Tiner Project’ aimed at strengthening the UK’s insurance regulation.
Tiner said: ‘We are developing a proactive, risk-based approach to insurance regulation that reflects the objectives given to us by Parliament: maintaining market confidence; ‘appropriate’ protection for consumers; raising consumer awareness of financial matters; and fighting financial crime. Regulations that need to change will change. Those that are no longer required will go.’
The review will look at insurance firms’ public and regulatory reporting, the nature and extent to which insurance companies use reinsurance, the role of appointed actuaries, and more technical issues such as the use of future profits to bolster solvency.
Former senior industry executives, known as ‘grey panthers’, will act as advisers to the insurance supervisors.
The FSA plans to employ 35 people including a panel of experts to strengthen its 200-strong insurance regulation team, an overall increase of more than a third since the FSA inherited responsibility for insurance regulation.
A full report on progress made under the Tiner Project will be completed by September 2002.
Tiner added: ‘We will make regulatory changes only after consulting widely and taking account of the likely impact on competition and innovation.’
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