A Practitioner's Guide to The FSA Regulation of Insurance

Covers the implications of the Solvency II directive - intended to create a European-wide solvency framework to provide adequate consumer protection and help the single market in financial services function better by improving capital allocation within the EU financial markets.

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With the publication of this third edition, it is time to acknowledge that the Financial Services Authority ('FSA') has come of age. It has achieved both maturity and self-confidence in its approach to insurance, and the industry is largely getting used to that approach. At the same time, the FSA's overall approach, in particular its championing of 'principles-based' regulation, has brought it a renewed standing within the EU, which is shamelessly adopting UK concepts in Solvency II. This approach is now also receiving positive international appraisal, in particular as an alternative to the rules-based conservatism still largely espoused in the USA. John Young, Senior Partner, Head of Financial Institutions Group, Lovells LLP. Although the actual implementation of Solvency II is several years away, its impact on insurance firms will be as great as the impact of Basel 2 on banks. The FSA has argued that lessons learnt from the implementation of Basel 2 mean that early planning is essential for firms to successfully prepare for the introduction of the new regulatory regime.
The implications of the Solvency II directive - intended to create a European-wide solvency framework to provide adequate consumer protection and help the single market in financial services function better by improving capital allocation within the EU financial markets - are anticipated in this 3rd edition of "A Practitioner's Guide to the FSA Regulation of Insurance". In addition, this "Practitioner's Guide" takes full account of the FSA's move to more 'principles-based regulation' in which a prescriptive rules-based regime is supplanted by one based on outcomes. What this means for insurance firms used to operating with detailed rule books is analysed and discussed. Sitting within this principles-based approach, the FSA has made amendments to the Insurance Conduct of Business sourcebook (ICOB) which are covered in full. Developments relating to the FSA's focus on treating customers fairly which they have described as 'pioneering' and 'making a real difference to consumers' are also covered in detail.