UK: Corporate Insurance, Regulatory Upate - FSA Policy Documents

CP 10/10: Quarterly Consultation No. 24

6th April 2010

In CP10/10 the FSA invites comments on miscellaneous amendments to the FSA Handbook. It proposes amendments to, inter alia:

  • The General Prudential sourcebook (GENPRU) to recognise an obligatory deduction from core Tier 1 capital and amend the clarifying guidance.
  • The Insurance Prudential sourcebook (INSPRU) in relation to rules on the valuation of reinsurance cash flows when calculating mathematical reserves.
  • The Conduct of Business sourcebook (COBS) to propose that, before approving promotions for an overseas person, a firm is required to take reasonable steps to ensure that the overseas person will deal with retail clients in the UK in an honest and reliable way.
  • Chapter 16 of the Supervision manual (SUP) to collect more meaningful details from firms.
  • Section A of the retail mediation activities return contained in SUP, with specific reference to the reporting requirements for insurance intermediaries subject to MIPRU.
  • Chapter 11 of SUP to clarify when shares or voting power should be aggregated for the purpose of determining whether someone who intends to acquire or increase control needs to notify the FSA before making the acquisition.
  • Chapter 10 of SUP to remove the reference to applications for approved person status generally being dealt within four or seven days, although the FSA states that the majority of applications are likely still to be dealt with within those deadlines.

The deadline for comments is June 6, 2010.

A copy of the Consultation Paper can be found at:

http://www.fsa.gov.uk/pages/Library/Policy/CP/2010/10_10.shtml

PS 09/20: Stress and Scenario Testing

9 April 2010

PS 09/20 sets out FSA expectations regarding firms' stress testing. The FSA has now produced an implementation plan template to help firms communicate their progress in preparing for the new reverse stress-testing requirement. Firms are asked to use the template to provide their FSA contact with details of their implementation plans by July 16, 2010. Some firms will also be contacted by their FSA contact on this matter over the coming weeks.

A copy of the Implementation Plan can be found at: http://www.fsa.gov.uk/Pages/About/What/International/stress_testing/index.shtml

CP 10/11: Implementing Aspects of the Financial Services Act 2010

26 April 2010

CP10/11 describes FSA policy relating to certain provisions of the Financial Services Act 2010 (the Act).

These policies cover:

  • Using the short selling disclosure rule-making power (chapter 2).
  • Using the power to impose financial penalties on those who breach short selling rules (chapter 3).
  • Using the power to suspend firms and individuals (chapter 3).
  • Using the power to impose financial penalties on individuals who have carried out controlled functions without approval (chapter 3).
  • Using the financial stability information gathering power (chapter 4).
  • Altering the Fees Manual to give the Financial Services Compensation Scheme the power to levy for management expenses incurred when acting on behalf of another compensation scheme — if it cannot recoup those expenses from the other compensation scheme — and to reflect the Special Resolution Regime funding changes (chapter 5).

The deadline for comments is June 25, 2010.

The FSA will publish a separate consultation paper on remuneration issues by the end of Q2 2010.

A copy of the consultation paper can be found at:

http://www.fsa.gov.uk/pages/Library/Policy/CP/2010/10_11.shtml

Other FSA Publications

Financial Services Act 2010
9 April 2010

On 8 April 2010, the Financial Services Act 2010 received royal assent.

The FSA has issued a short statement stating that the Act will give rise to a number of changes to its objectives, powers and duties. The main changes are:

  • A new financial stability objective for the FSA. This includes a duty for the FSA to determine and review its financial stability strategy, in consultation with the Treasury.
  • The FSA is required to establish a new consumer financial education body.
  • The FSA is given further enforcement powers including the power to suspend individuals, and firms, along with the ability to fine those who are carrying out a role that needs FSA approval without the necessary approval being in place.
  • The FSA having the power to specify that remuneration agreements in breach of its remuneration rules are void.

The FSA has also published a new web page on the Act, on which the FSA sets out the timing for different parts of the Act to take effect. The financial stability objective and the duty to create a consumer financial education body will come into effect immediately. The duty to make rules regarding remuneration policies and recovery and resolution plans (living wills), and the power to make rules on short selling and enforcement powers will come into force two months after the Act is passed. The power to make consumer redress scheme rules and the requirement regarding publishing decision notices will take effect upon a Treasury commencement order.

A copy of the Statement can be found at: http://www.fsa.gov.uk/pages/Library/Communication/Statements/2010/act2010.shtml

Solvency II - IMAP Update
9 April 2010

The FSA has published its latest Solvency II IMAP update. This update provides information to assist firms with their preparations for the 'pre-application' phase of the internal model approval process. It follows earlier papers setting out the FSA's approach to internal model approval under Solvency II.

A copy of the Update can be found at:

http://www.fsa.gov.uk/pubs/international/imap_update_april.pdf

Report on Resilience Benchmarking
13 April 2010

The report sets out the findings of the resilience benchmarking survey for the insurance sector. The survey addresses three main questions:

  • How resilient would the insurance sector be if faced with a major operational disruption (such as terrorist attack, severe weather or a flu pandemic)?
  • How quickly could it recover?
  • What needs to be done to improve its resilience?

The survey found that insurance firms appear to be making good preparations in areas such as providing for staff welfare during a disruption, and in the level of testing carried out. However, the survey also highlighted several key areas in need of attention and improvement, namely, recovery timeframes, risk assessments, third party involvement, outsourcing, third party providers, security and funding.

A copy of the Report can be found at: http://www.fsa.gov.uk/pubs/other/res_bench_report_v2.pdf

General Insurance Newsletter
27 April 2010

The FSA has published the latest edition of its General Insurance newsletter which covers:

  • Gearing up for Solvency II.
  • Stress and scenario testing.
  • The FSA's view on key risks for general insurers.
  • Update on the Competition Commission's PPI reforms.
  • Threshold condition 4 — adequate resources.
  • Climate change (focus on flood related cover).
  • Client money and assets.
  • Resilience benchmarking.
  • Third party capture.
  • Recent FSA enforcement cases.
  • Upcoming FSA events.

A copy of the Newsletter can be found at: http://www.fsa.gov.uk/pubs/newsletters/gi_apr10.pdf

Life Insurance Newsletter
27 April 2010

The FSA has published the latest edition of its Life Insurance newsletter which covers:

  • The FSA's view of key risks.
  • Solvency II.
  • Stress and scenario testing.
  • With-profits.
  • Mutual capital.
  • Enhanced capital notes.
  • Resilience benchmarking.
  • Reinsurance and INSPRU.
  • News roundup.
  • FSA enforcement.

A copy of the Newsletter can be found at: http://www.fsa.gov.uk/pubs/newsletters/life_ins1.pdf

EUROPE

European Commission - Financial Conglomerates Directive Review

9 April 2010

The European Commission has published feedback on its consultation regarding the review of the Financial Conglomerates Directive.

Respondents broadly welcomed the initiative and recognised the major issues with the FCD as outlined by the commission, as well as the commission's suggestions to solve them. However, there were divergences concerning the commission not taking up the industry's main concern, namely the cross-sectoral alignment in the definition of capital.

Further information about the Financial Conglomerates Directive can be found at: http://ec.europa.eu/internal_market/financial-conglomerates/supervision_en.htm

Solvency II

CEIOPS – Level 2 Advice on Calibrations

15 April 2010

CEIOPS has published an exhaustive calibration paper which is the main supporting document for its Level 2 advice on calibrations. The paper provides background information and compiles all the technical analysis carried out by CEIOPS in calibrating the SCR standard formula, as well as key parameters for the calculation of the Technical Provisions.

The European Commission has developed the draft technical specifications for testing the overall impact of L2 measures in QIS5. The draft QIS5 technical specifications published today by the European Commission may deviate from the calibration paper and L2 advice as they are built upon CEIOPS advice, stakeholders' input and the Commission's own work.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.