FCA report, Brexit and US-EU covered agreement on agenda for IUA
A report by the UK’s Financial Conduct Authority (FCA) that will assess competition in the wholesale insurance broker sector dominate the International Underwriting Association’s (IUA) agenda, alongside Brexit, in 2019, the representative body has said.
The body, which represents the London company market, has issued its annual business plan to members and has stressed that the fall-out from Brexit is far from the only topic occupying attention.
Sometime in the next few months results from a two-year FCA study to assess competition in the wholesale insurance broker sector. This exercise is aiming to ensure that the market fosters innovation and competition and the IUA will be ready to discuss any findings or recommendations with the regulator.
Also in 2019, following the signing of covered agreements between the US and the EU and UK to boost transatlantic re/insurance trade, the association expects considerable activity to implement necessary regulations at a state level. It will also be monitoring developments in the US surplus lines market with a possible review of business definitions and trust fund requirements in mind.
Other supervisory subjects that will be monitored include International Financial Reporting Standard 17 on insurance contracts, a scheduled review of Solvency II and changes to international trade sanctions.
Dave Matcham, chief executive of the IUA, said: “The countdown to Brexit has loomed large over all our industry’s forward planning for some time now. In 2019 we hope to see a functioning transition period, productive discussions on a new trading relationship for UK financial services with the EU and many other free trade agreements around the world. Contract continuity, business underwriting practices and the continuing operation of London Market branches will all require continual attention and understanding.
“There are, however, many other regulatory developments affecting our market independent of Brexit and the year ahead will be busy. The IUA will be maintaining regular and substantive dialogues with supervisors at home and abroad to ensure our members’ interests are well comprehended.”
Elsewhere the IUA’s business plans sets out a programme of work to ensure that business process modernisation projects are effectively rolled out across the company market. Chief amongst these is e-placing as IUA members aim to continue voluntarily matching adoption levels mandated in the Lloyd’s market. Other initiatives include the automation of single claims agreement parties and a review of service levels for centrally provided processing services.
The association’s underwriting and claims services will continue to support the everyday operation of members’ business with the publication of model clauses, analysis of market trends, education and training and compliance support. During 2019 there will be a particular focus on emerging risks, with the publication of a paper on cyber warfare, and on new developments affecting multiple lines of business.
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