Lords opens commercial re/insurance inquiry

The House of Lords Industry and Regulators Committee will tomorrow open its inquiry into the regulation of the commercial insurance and reinsurance market. With initial evidence from LIIBA and the London Market Group, the committee will explore whether regulatory policy is suitably designed and proportionately applied, as well as examining the possibilities for improving regulation following Brexit.

The inquiry will consider the roles of the Bank of England and Financial Conduct Authority and assess the effect of regulation on customers and the market’s global competitiveness.

In the first session, the committee will ask industry representatives how they see the future of commercial insurance and reinsurance regulation. LIIBA’s CEO, Christopher Croft and LMG CEO, Caroline Wagstaff will both be giving evidence.

Areas the committee will cover with the witnesses include the size and significance of the insurance and reinsurance market relative to the wider UK financial sector; whether regulation of the industry in the UK is proportionate and how it can be improved; and whether UK regulation in the sector encourages or discourages innovation.

Given the influence of Solvency II on worldwide insurance regulation, it will also ask if the UK, despite Brexit, is still largely dependent on EU regulation policy in setting the climate for insurance regulation in this country; and whether or not the industry would like to see regulation in the UK move away from policies in the EU.

Finally, it will explore whether regulation has caused insurers to base themselves outside the UK, and whether a requirement on regulators to support UK competitiveness in the international insurance market would be of benefit.

The committee is inviting written evidence to this inquiry until 11th February 2022. Its call for evidence asks the following questions:

• Is the UK regulatory framework appropriate for the commercial insurance and reinsurance sectors?

• To what extent do the Bank of England and Financial Conduct Authority apply and interpret regulatory policy in these areas in a proportionate manner and strike the right balance between regulation and competitiveness?

• How do the activities of the UK’s financial regulators affect the ease of carrying out commercial insurance and reinsurance business in the UK? What impact does this have on the availability and cost of insurance cover in the UK?

• What is the status of the London Market’s global competitiveness, and how is this impacted by different regulatory approaches in other territories?

• What improvements could be made to the regulation of commercial insurance and reinsurance in a post-Brexit context?

Relevant parties may submit evidence here: https://committees.parliament.uk/submission/#/evidence/697/preamble

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