Recent regulatory developments of interest to insurers and their intermediaries. See also our General regulatory news in the Related Materials links.
COVID-19: business interruption insurance test case judgment due on 15 September 2020
On 9 September 2020, the UK Financial Conduct Authority (FCA) updated its webpage on the High Court business interruption insurance test case to advise that the court has stated that the judgment will be handed down at 10.30am on 15 September 2020.
The FCA will publish the judgment on its webpage once available.
Personal and commercial lines insurance intermediaries: FCA Dear CEO letter on supervision strategy
The FCA has published a Dear CEO letter on its supervision strategy until September 2021 for the personal and commercial lines insurance intermediaries portfolio. This includes general insurance (GI) intermediaries serving retail and/or commercial customers, loss assessors and firms for which broking of insurance products is ancillary to their primary business.
In the letter, the FCA sets out its view of the key risks firms in the portfolio could pose to consumers and markets. It asks relevant firms to consider the extent of these risks in their business and assess if their strategies reduce the risks.
FCA's general insurance value measures pilot: fourth set of data
The FCA has published the fourth set of data in its GI value measures pilot, covering data for 28 insurers (both UK and EEA firms) for the year ending 31 August 2019.
The FCA has also published a webpage on its GI value measures work, which comments on the fourth set of data. It is particularly concerned about the value of personal accident and key cover add-on insurance.
Prudential treatment of investments in infrastructure and strategic equity: IAIS survey
The International Association of Insurance Supervisors (IAIS) has launched a survey on the existing prudential treatment of investments in infrastructure and strategic equity.
The IAIS is exploring whether there should be a differentiated capital treatment of certain eligible infrastructure (both equity and debt) as well as strategic equity investments within the Insurance Capital Standard (ICS). As a first step, it is looking for potential data sources that could be used to decide whether there should be a differentiated treatment for infrastructure investments and strategic equity investments, as well as to inform a specific calibration, should a differentiated treatment be pursued.
The purpose of the survey is to:
- gather information about investments in infrastructure and strategic equity, including quantitative data sources, studies and publications that could be valuable for the IAIS in its work; and
- provide an opportunity for stakeholders to share their experience in such investments.
The survey will be complemented by another survey, addressed to IAIS members and focussed on existing treatments for infrastructure and strategic equity under jurisdictional prudential frameworks.
Annex 1 to the survey contains a strawman proposal that provides a temporary reference point in terms of potential relevant definitions and criteria applicable to investments in infrastructure and strategic equity. It is largely based on the technical specifications from 2017 to 2019 in the context of ICS Field Testing and in 2020 in the context of ICS confidential reporting. The IAIS welcomes any feedback from respondents on the strawman.
Responses to the survey should be submitted to the IAIS by 7 December 2020.