insurance companies, insurance intermediaries, and any others selling insurance
products in the UK have to be regulated.
regulation of the insurance industry is not and does not intend to be a no fail
one. Regulation seeks to protect consumers.
than a tick-box reactive system that failed badly, the intent of the latest
regulatory changes is to have a pro-active flexible system that heads off
problems before they become disasters.
Prudential Regulation Authority
The Prudential Regulation Authority (PRA)
is responsible for the day-to-day supervision of financial institutions. The
PRA will not operate a zero failure regime in its approach to insurers. Failing
insurers will be allowed to go bust in a way that avoids significant adverse
effects on policyholders.
The PRA categorises Britain's insurers
according to how big an impact their failure would have on the financial
The PRA is the overall supervisor of
The threshold conditions for regulated
companies such as insurers being able to carry on business in the UK are-
- Head office and senior management must be
- Business must be conducted in a prudent
manner with adequate financial and non-financial resources.
- Must be fit and proper and appropriately
- Must have adequate capital, liquidity,
asset valuation, provisioning and reserving.
The PRA is the lead regulator for Lloyd’s
of London, with the society itself and Lloyd’s managing agents regulated both
by the PRA and FCA.
Financial Conduct Authority
The Financial Conduct Authority (FCA) seeks
to protect consumers, promote competition and ensure integrity in markets.
It supervises all firms to ensure that
business across financial services and markets is conducted in a way that
advances the interests of all users and participants.
It has a single strategic objective of
ensuring that the relevant markets function well.
The key FCA's objectives are:
- To secure an appropriate degree of
protection for consumers.
- To protect and enhance the integrity of
the financial system.
- To promote effective competition in the
interests of consumers.
The FCA focus is on:
- Ensuring that insurer strategies are
aligned with producing appropriate outcomes for consumers.
- Tackling market abuse by taking strong
enforcement action to deter future misconduct.
- Ensuring a truly competitive insurance
It has a product intervention power that
enables it to act quickly to ban or impose restrictions on financial products.
It has powers of disclosure to publish
details of warning notices issued in relation to disciplinary action.
It has powers to take formal action against
misleading financial promotions and disclose the fact it has done so.
Lloyd’s of London
For Lloyd’s of London, the society itself
and Lloyd’s managing agents are regulated both by the PRA and FCA.Members
agents and brokers are solely regulated by the FCA.
Five key points
- Regulation changed in 2013 from tick-box
- The overall regulator for insurers is
Prudential Regulation Authority (PRA).
- The day-to-day regulator for insurers is
Financial Conduct Authority (FCA).
- The regulator of intermediaries is
Financial Conduct Authority.
- UK regulation works within a framework of
Companies on this site
There are some specialist companies on this
site based outside the UK and not regulated by the FCA.
We identify such companies on the company
profile page with:
This company is not authorised in the UK by
the Financial Conduct Authority, so customers have no protection under the
Financial Services Compensation Scheme.
Being regulated does not prevent failure;
the FCA is a regulator not a guarantor.
As we are an information site and not
selling insurance, we do not in any way investigate, approve or regulate
companies on this site.
If the FCA issues warnings or withdraws
authorization from any businesses on the site, or if they go into
administration or liquidation, we will withdraw companies immediately.
At all times we retain the right to remove
any company at our discretion without giving reasons.
There are well-known insurers not on this
site, simply because they do not sell direct to consumers.