After a year of upheaval for the UK insurance sector in 2021, there seems little prospect of 2022 being any quieter.
From a regulatory perspective, 2021 began with the end of the Brexit transition period. And while firms operating in UK insurance markets have been insulated from the full impact of Brexit during 2021, this is set to change in 2022. Solvency II reforms can now also be introduced in the UK without regard to the constraints of EU membership.
Meanwhile, the FCA has embarked on an ambitious transformation programme, putting consumer protection at the heart of its focus on becoming a "more assertive, innovative, and adaptable" regulator. The introduction of a new Consumer Duty is expected to bring about a step change in how financial sector firms behave. Other recent developments carrying over into 2022 include proposals to improve regulated firms' oversight of Appointed Representatives.
ESG remains, of course, high on the agenda of firms and regulators worldwide, with increasing engagement at Board and senior executive level on a range of issues. Notably, COP26 brought climate change into sharp focus. The PRA and the FCA are also looking to "accelerate the pace of meaningful change" in diversity and inclusion in the financial services sector. Further activity can be expected in relation to each of "E", "S" and "G" during 2022.
Other current areas of focus are the government's post-Brexit review of the regulatory framework for financial services and the operational resilience of firms, including the challenges brought by Covid-19.
Our briefing, which can be found here, looks at some of the key regulatory developments that have taken place in 2021 and considers the outlook for 2022.
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