29 January 2015 Insurance

BoE needs more experienced staff: IUA

The International Underwriting Association (IUA) has raised concerns over a lack of insurance-related experience at the Bank of England.

The Bank of England recently appointed Sam Woods as executive director for insurance supervision. Woods succeeds Julian Adams who departed in August 2014 to become group regulatory director at life insurer Prudential.

Woods joined the Financial Services Authority (FSA) in 2011 and transferred to the Bank in 2013 with the integration of the PRA. He most recently served as director for financial stability strategy and risk, and prior to that was director for domestic UK banks supervision.

Dave Matcham, the chief executive of IUA, welcomed Woods appointment but added that the association is concerned that the regulatory regime for insurance in the UK needs more staff with industry experience gained from holding senior positions in the sector

“This has been a worry since the establishment of the current system which shared supervision of insurers between the Prudential Regulation Authority, the Financial Conduct Authority and the Bank of England,” he said.

“Insurance figures are not well represented on senior committees such as the PRA board and the Bank of England Financial Policy Committee. This also means that, while there are many very talented and highly skilled regulators, there is a lack of insurance-specific expertise from which the Bank of England is able to select senior executives.

“The insurance sector is quite different from banking with different supervisory requirements. It does not present the same systemic risk to the wider economy. Given the wide range of responsibilities shouldered by senior regulators it is vital that they maintain an intimate understanding of insurance matters.

“The treasury growth action plan sets ambitious goals for growth for the insurance sector, a challenge that the IUA is supporting very strongly. The general insurance industry in particular needs to be given support to ensure that the London market’s competitiveness is not compromised by an inappropriate application of banking regulatory methods.”

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