2022 proved to be as busy for insurance firms and regulators as we predicted last January. Yet more change can be expected in 2023.
In Brexit-related news, the Treasury is taking forward plans to change the UK’s Solvency II regime. Its announcement coincided with the Autumn statement, signifying the importance attributed to Solvency II reforms within the Government’s wider post-Brexit plans for the economy.
Solvency II reforms are just one of a series of regulatory changes proposed by the Government in its flagship Financial Services and Markets Bill (FSM Bill). In tandem with the FSM Bill, the Treasury has announced a series of reforms, known as the Edinburgh Reforms, which are similarly aimed at driving growth and competitiveness in the financial services sector post-Brexit. (See our recent blog post and webcast series for more details.)
Meanwhile, the FCA has published final rules and guidance on the new Consumer Duty in what it describes as a “paradigm shift” in its expectations of firms. The challenge for firms to meet implementation deadlines of 31 July 2023 for new and existing products and 31 July 2024 for closed products and services remains considerable.
Unsurprisingly, ESG continues to be another key focus, with ESG-related transparency set to be the theme for the next 12 months. In early January, the PRA’s statement of supervisory priorities for 2023 confirmed its continued focus on the financial risks that climate change presents for the sector.
Other priorities for the PRA include consulting on the introduction of a resolution framework for insurers and on a new regulatory framework for diversity, equality and inclusion (DEI).
We consider these, and other, issues more fully here.