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Home > Prudential Regulation Authority > Information for smaller firms
 

Information for smaller firms

Assessing risk  |  Information for smaller firms  |  Mitigating risk  |  Proactive intervention framework  |  Regulation of insurance


Credit unions, small overseas banks, small overseas insurers and mutual insurers are in the Prudential Regulation Authority’s (PRA) lowest category of potential impact. At an individual level therefore these firms have little capacity to cause significant harm to the stability of the financial system. They could, however, generate some disruption to the financial system at an aggregate level, in the event of problems across a whole sector. 

Additionally, the PRA’s objectives require it to promote the safety and soundness of all the firms it supervises, and to contribute to securing an appropriate degree of protection for all policyholders. This motivates a baseline level of supervisory monitoring for these firms.
 
The PRA’s supervisory approach for these firms therefore includes:
 
  • supervising firms on a portfolio basis using automated tools to analyse your regulatory returns;
  • examining individual firms when a risk crystallises (as discovered through, for example, a visit to the firm, or an approach from the firm itself), or in response to authorisation requests from the firm;
  • conducting peer group analysis across sectors as a whole, to develop a clear understanding of the risks posed by both small firms in aggregate and by a typical firm;
  • conducting annual assessments of these firms, but in large peer groups.
Smaller firms are not visited by the PRA on a fixed, regular schedule, but all firms, regardless of category, are subject to on-site work by the PRA - with a period of notice - at any time.
 
These firms do not have a named supervisor and instead should contact the Firm Enquiries Team at the PRA:
 
Phone: +44 (0)20 3461 7000
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