PRA Practitioner Panel and Insurance Sub-committee – Annual Report 2021-22

Published on 23 June 2022

1: Overview

1.1 In 2021/22 the PRA Practitioner Panel (Panel) continued to effectively represent the interest of practitioners by considering and providing appropriate scrutiny on significant PRA policy and regulatory developments which benefit from Panel input. This has been achieved through regular discussions with relevant PRA and wider Bank of England policy leads, senior management, and Prudential Regulatory Committee (PRC) members at Panel meetings.

1.2 The Panel’s established approach of early engagement is central to its ability to add value to the PRA’s approach to policymaking. The Panel is committed to continuing to provide challenge and advice to the PRA, ensuring that practitioners’ views are appropriately considered. Over the course of 2021, the Panel secretariat conducted an effectiveness review of the Panel with participation from Panel members as well as key stakeholders across the PRA. Findings from the Panel effectiveness review concluded that the Panel was operating effectively against its remit and purpose as set out in its Terms of Reference, whilst suggesting some minor improvements.

1.3 The Panel has a sub-committee, the Insurance Sub-committee (Sub-committee), which provides a dedicated forum to discuss the PRA’s policies and practices related to the insurance sector. Like the Panel, the Sub-committee follows the approach of early engagement to enable added value to policies. Additionally, information is shared between the Sub-committee and the Panel.

2: PRA Practitioner Panel

Panel membership – as at March 2022:

Chris Bannister, General Manager, Europe and Americas, Westpac Banking Corporation – UK Finance
Debbie Crosbie, Chief Executive Officer, TSB Bank – UK Finance
Mary-Anne Daly, Chief Executive Officer, Cazenove Capital, UK – Personal Investment Managements & Financial Advice Association (PIMFA)
Martin Fisher, Regulatory and Legal Officer for Northern Ireland, ‎Irish League of Credit Unions – NI Credit Unions
Bruce Fletcher, Chief Risk Officer, NatWest Group and NatWest Holdings – UK Finance
Tim Harris, Direct Line Group – Association of British Insurers
Robert Kelly, Chief Executive Officer, Association of British Credit Unions Limited (ABCUL) – Mainland UK Credit Unions
Tonia Lovell, Director of Risk Management and Society Secretary, Bath Building Society – Building Societies Association
Andy Nelson, Chief Financial Risk and Data Officer, Skipton Building Society – Building Societies Association
Ruairi O’Healai, Managing Director, Morgan Stanley Investment Management – The Investment Association
Helen Pickford, UK Chief Financial Officer, Zurich Insurance Group – Association of British Insurers (Practitioner Panel Chair)
Mark Rhys, Banking Partner, Deloitte – The Institute of Chartered Accountants in England and Wales (ICAEW)/ The Institute of Chartered Accountants of Scotland (ICAS)
William Smith, Managing Director, Head of International, Capital Markets, BMO Capital Markets – Association of Foreign Banks
Andrew Stoker, Chief Financial Officer, Rothesay – Association of British Insurers

2.1 As outlined in the Panel’s Terms of Reference,^{footnote [1]} members serve for a three year term with the opportunity of extending this for an additional term. During 2022, Francesca McDonagh’s second term came to an end. UK Finance nominated Bruce Fletcher in replacement.^{footnote [2]}

2.2 During the reporting period, Victoria Stubbs stepped down from the Panel. She was replaced by Tonia Lovell as the Building Societies Association representative in January 2022. Andrew Stoker^{footnote [3]} was nominated by the Association of British Insurers to replace Aki Hussain who also left the Panel during the course of the year.

2.3 Helen Pickford has continued as Panel Chair. We are currently in the process of appointing a member to be Deputy Panel Chair following Victoria Stubbs’ departure.

Panel engagement with the PRA

2.4 The Panel met six times during the reporting period. Most meetings this year have taken place via videoconference, with one hybrid meeting allowing for attendance either in person or via videoconference.

2.5 As in prior years, Panel members were provided with briefings from, and had discussions with, relevant PRA policy leads. Meetings were attended by Executive Directors from the PRA and policy areas of the Bank of England, as well as the PRA Chief Executive Officer (CEO) on some occasions. Key outcomes and insights from these meetings continue to be fed back to relevant decision makers and policy leads within the PRA and the Bank of England, contributing to the policy making process.

2.6 The PRA CEO continues to hold bilateral meetings to discuss the Panel’s views and other relevant issues with the Panel Chair.

Examples of items considered by the Panel and impact on the PRA

2.7 The following items are examples from the reporting period of where the Panel’s views were sought and it provided significant added value to the policy process.

Issue	Description
Developing an Index of Prudential Policies	The PRA shared its work on the development of an Index of Prudential Policies and the prototype of web pages. The Panel provided ideas on scope and inclusion of materials, as well as presentational aspects of the web pages.
Strong and Simple Prudential Framework	The PRA returned to the Panel for their thoughts on a Discussion Paper on the Strong and Simple Prudential Framework. The Panel reflected on the definitions and scope of the policy as well as operational aspects of implementation. The subject was revisited later in the year, following responses to the Discussion Paper.
New Forms of Digital Money	The Panel provided its feedback on a Discussion Paper on new forms of Digital Money and their potential impact on the financial system and economy. The Panel reflected on the challenge of governance of digital currencies and the necessity for international co-ordination.
Diversity and Inclusion in the Financial Services Sector	The Panel considered diversity and inclusion in the financial sector and its importance for decision making in the industry. The Panel discussed the importance of creating the culture required to deliver change.
Future Regulatory Framework	The PRA sought views on the second consultation from HM Treasury on the post-Brexit framework for financial regulation. The Panel discussed proposed statutory requirements relating to the Panel and Sub-committee and provided its views on proposals for a cost-benefit analysis panel.

Panel Forward Agenda

2.8 The Practitioner Panel is scheduled to meet six times in the 2022/23 reporting period. Hybrid meetings are being held, with Panel members either attending in person at the Bank of England offices or via videoconference. The Forward Agenda will continue to be shaped by Panel members, and the PRA Executive and Senior Management Team. The focus of the agenda will continue to include items that are at an early stage of policy development; however, some topics discussed during the course of the reporting period are expected to return to the Panel as they continue to develop. The agenda will also include any emerging and urgent issues that would benefit from a Panel discussion, as determined by the Panel or at the request of the PRA.

3: Practitioner Panel Insurance Sub-committee

Sub-committee membership – as at March 2022:

Andrew Chamberlain, Chair of the Actuarial Standards Committee of the International Actuarial Association – Institute and Faculty of Actuaries
Paul Corver, Director, Insurance & Reinsurance Legacy Association (IRLA) – IRLA
Peter Green, Chief Executive, Healthy Investment – Association of Financial Mutuals
Neil Griffiths, Chief Risk Officer, Asta – Lloyd’s Market Association
Tim Harris, Direct Line Group – Association of British Insurers (Sub-committee Chair)
Patrick Nolan, Regional Chief Risk Officer, EMEA, Chubb – International Underwriting Association
Helen Pickford, UK Chief Financial Officer, Zurich Insurance Group – Association of British Insurers
David Sansom, Chief Risk Officer, Lloyd’s – Lloyd’s
Andrew Stoker, Chief Financial Officer, Rothesay – Association of British Insurers
Vacant (nomination process in progress) – Association of British Insurers

3.1 Patrick Nolan joined the Sub-committee, as the International Underwriting Association representative, with effect from October 2021. Peter Green of Healthy Investment was also appointed as a member in October 2021 to represent the Association of Financial Mutuals, as Stuart Tragheim’s term came to an end. Andrew Stoker^{footnote [4]} was nominated by the Association of British Insurers to replace Aki Hussain who left the Sub-committee during the course of the year.

3.2 Similar to the Practitioner Panel, members serve for a three year term with the opportunity of extending this for an additional term. Andrew Chamberlain and Paul Corver began their second terms which are due to end in July 2024.

Sub-committee engagement with the PRA

3.3 The Sub-committee met three times within the reporting period. Similarly to the Panel, members were provided with briefings from, and had discussions with, relevant policy leads, and meetings were attended by Executive Directors and Directors from the PRA, as well as the PRA CEO on one occasion.

Examples of items considered by the Sub-committee and impact on the PRA

3.4 The following items are examples from the reporting period of where the Panel’s views were sought and it provided significant added value to the policy process.

Issue	Description
Insurance Stress Testing	The Sub-committee provided their feedback on early-stage proposals to changes to the insurance stress testing regime. Later in the year, the Sub-committee considered the scenarios proposed for the 2022 stress testing exercise.
Ease of Entry into the UK Insurance Market	The Sub-committee discussed plans for a proposed mobilisation regime for insurers and provided their views on the proposed framework and merits of the initiative.
Review of Solvency II	The Sub-committee considered four elements of HM Treasury’s Review of Solvency II: Call for Evidence which sought industry input on how the current regime could be reformed. The areas of focus were: Solvency II thresholds; risk margin methodologies; group solvency capital requirement; and matching adjustment. The Sub-committee discussed potential reforms being considered by the PRA.
Resolvability of Insurers and Ease of Exit	The Sub-committee considered the PRA’s latest thinking on ‘Resolvability’ and ‘Ease of Exit’ and the identification of barriers by firms that might impede an orderly exit. The members reflected on differences between the banking and insurance industries.

Sub-committee Forward Agenda

3.5 The Sub-committee is scheduled to meet three times in the 2022/23 reporting period. The Forward Agenda is, and will continue to be, shaped by Sub-committee members and the PRA Executive and Senior Management Team. The focus of the agenda will include items that are at an early stage of policy development.

Panel of Terms of Reference.
Bruce Fletcher was appointed to the Panel in March 2022.
Andrew Stoker was appointed to the Panel and Insurance Sub-committee in March 2022.
Andrew Stoker was appointed to the Panel and Insurance Sub-committee in March 2022.