By Simon Debbage of the Bank’s Financial Stability Directorate and Stephen Dickinson of the Prudential Regulation Authority’s Regulatory Policy Department.
The financial crisis has necessitated a re-examination of the level, nature and distribution of risk across the financial system, including insurance companies. In April 2013, the Prudential Regulation Authority, as part of the Bank of England, became responsible for the prudential regulation and supervision of insurers. But the degree to which a common understanding has been reached on how insurers might affect financial stability is lower than, for example, the analogous discussion for banks. In a Workshop hosted by the Bank in July 2013, the risks posed by insurers for both insurance policyholders and financial stability were discussed, together with what this might mean for how insurers should be regulated and supervised.