London Market companies are in the midst of a regulatory maelstrom which is taking up significant management time and compliance costs, the International Underwriting Association has said.

Together with its member firms the IUA has produced a new statement of public policy positions identifying the most important legal and regulatory questions facing its member companies and how the association hopes to answer them.

The statement emphasises that the creation of two new insurance authorities in the UK, the development and completion of Solvency II and the supervision of international groups are the key issues facing the London Market.

On the future of the regulatory environment in the UK the IUA asserts that the interests of UK insurers and reinsurers must be effectively represented within the proposed Prudential Regulatory Authority and the Bank of England. Meanwhile the Financial Conduct Authority must not burden wholesale insurers with duplicative or over-reaching consumer-focussed regulation.

In Europe the IUA is keen to see that Solvency II does not result in excessive capital charges and reporting requirements for companies. At the same time it is concerned that adequate regulatory staff and resources are devoted to implementation of the new regime.

In the US the association urges effective implementation of the Dodd Frank Act provisions affecting members’ business, for example harmonised surplus lines reporting rules. And internationally the IUA declares that insurers and reinsurers should ideally be regulated by a lead supervisor when regulated on a group-wide basis.

Nick Lowe, the IUA’s director of government affairs, said: “These public policy positions set out clearly how the IUA would like to see the regulatory environment for the London Market develop over the coming months and years.

“The international nature of our industry means that it is affected by supervisory decisions by many different organisations and jurisdictions. It is the IUA’s aim to ensure that any such decisions are not reached without full consideration of the views of our member companies.”

Other areas where the IUA intends to voice its members’ interests include international accounting standards, UK and international taxation, financial crime and sanctions and reform of insurance contract law.

IUA chief executive Dave Matcham commented: “The last 12 months has seen regulatory issues move up the company market’s agenda and the IUA has needed to monitor and respond to a growing number of developments. We are now going through an important period of change that will have long lasting implications for the way in which we conduct our business.”

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