The Insurance Insider
The Prudential Regulation Authority (PRA) will work with Lloyd’s to streamline some of the administration around Solvency II, the market’s chairman revealed at a gala dinner late last month.
Speaking at the annual Lloyd’s City Dinner, John Nelson said that regulation had to keep pace with the significant changes across financial services.
“The Solvency II experience we have all been through over the past two or three years has been particularly wearing and costly – unnecessarily so.
“I am pleased to say there is recognition of this and the PRA has agreed to engage with us in an exercise next year to simplify some of the processing and bureaucracy around Solvency II.”
The news will be welcomed by those who believe that the regulators should amend the convoluted processes that have come with Solvency II, which comes into effect on 1 January.
In a speech to the London Market Group (LMG) forum, chairman Steve Hearn said he spoke at length when the London Matters report was published last year of how he wanted the general attitude of regulators – in particular the PRA – to change.
“We have made some progress along these lines and the Treasury, PRA and Financial Conduct Authority (FCA) exchanged letters that went some way towards making this point. But this will be an area where continuous improvement will always be possible and so we will not let this one lie,” Hearn said.
Nelson echoed Hearn in his speech, highlighting that the insurance industry needed strong, prudential and proportionate regulation that benefited customers.
“What is good for our customers is good for the City and encourages inward investment into the London insurance industry,” he said.
But Nelson also acknowledged that regulators were much criticised and emphasised the good work they did.
“Certainly from where I sit, I believe that both the PRA and the FCA are, in very large part, doing an excellent job and acting in Lloyd’s best interests.”