2 August 2016 Insurance

Regulator has responsibility to promote UK post-Brexit: BIBA

The UK’s regulators must accept an element of responsibility for promoting the UK’s financial services sector, including insurance, in a post-Brexit environment, the British Insurance Brokers’ Association (BIBA) has claimed in a letter to senior government figures.

The representative body has sent a letter to senior government figures, spelling out what, in its members’ opinions, are the most important considerations as the country faces its future outside the European Union (EU). The letter includes a section on the role of the regulator going forward.

While BIBA acknowledges that its members have welcomed the Government’s support in providing proportionate, strong regulation and professional guidance, which is helping the insurance market to entice and sustain top-rated capital, it says it will become increasingly important that the regulatory environment also helps the market compete.

“In a post-Brexit economy, regulation will be an even bigger factor for foreign investors in deciding where to place capital investment and it is vital that our regulatory regime helps the UK actively compete,” the letter said.

“Many regulators around the world have an objective to both regulate and promote the industry they regulate, and they do it very well.

“Singapore, Bermuda, Qatar and Dubai are examples of where regulators have this mandate and actively support the promotion of their local insurance markets.”

BIBA adds that the FCA and the Prudential Regulation Authority (PRA) do not have these objectives and they do not even have to contemplate the consequence of their actions on the competitiveness of the financial services sector.

This means, the letter says, that in the UK there is no mechanism to ensure that the cumulative impact of regulation is not damaging the ability of the industry to fulfill its role in servicing the economy, or to help London sustain its place as a global centre of insurance against overseas competitors.

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