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2. Feedback and Looking Ahead. Reg Clarke Associate, Retail General Insurance Team. 2.1 What we are seeing Data review Peer review Board capability and governance Firm Enquiries Function: Trends. Feedback and Looking Ahead. Key Performance Indicators: 2012 Total funds up 17%

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2 feedback and looking ahead

2. Feedback and Looking Ahead

Reg Clarke

Associate, Retail General Insurance Team


2.1 What we are seeing

  • Data review

  • Peer review

  • Board capability and governance

  • Firm Enquiries Function: Trends

Feedback and Looking Ahead


Key Performance Indicators: 2012

  • Total funds up 17%

  • Gross Written Premiums up 15%

  • Capital levels increased

  • BUT at individual firm level

    experiences rather mixed

Feedback and Looking Ahead


  • Capital levels increasing steadily

  • Fewer than 10% of firms have Pillar 1 ratios below 150% of their capital resource requirement

  • Feedback and Looking Ahead


    2.1 What we are seeing: Data review (annual

    returns)

    • Reporting quality generally good but

      • Review of ECR (Enhanced Capital Requirement) forms reveal misreporting of individual capital guidance

        • Firms need to understand the ICG they have been set

        • Firms ICG cannot be lower than MCR

    • Misreporting of base capital resource requirement by some firms

      • Impacted by Euro : Sterling exchange rate

      • Applies from 31 December

    Feedback and Looking Ahead



    • Annual periodic summary meeting for peer groups of firms

    • Key objectives of review is to focus on identifying and feeding back trends and issues to the firms within that peer group

    • Challenging exercise given niche markets of some firms

    • PRA in early stages of review. Expect to cover our specified groupings over 18 month timeframe (by Q2 2015)

    Feedback and Looking Ahead


    • First point of contact, liaising closely with key areas of the PRA and Bank.

    • Dedicated team of five, wide range of regulatory experience.

    • Webpage available to provide information on the issues you contact us about or are relevant to you, including reporting and authorisations.

    Feedback and Looking Ahead


    • Significant PRA resource spent in dealing with the issue of Board capability and governance.

    • PRA expects firms to have regular Board review and assess:

      • Does the board have a good mix and balance of skills, experience, independence and knowledge to enable them to discharge their responsibilities effectively?

      • Is the Board satisfied that the business is run prudently?

      • Have clear structures of accountability and delegation been established?

      • Does the Board provide appropriate direction and challenge to the management team?

        NB:

    • These expectations apply to all firms, regardless of size

    • The things we would expect of a Board are referenced in the our Principles and in UK Corporate Governance Code

    Feedback and Looking Ahead


    • Intend to seek Board capability and governance. forward looking quarterly capital data

    • PRA assessing the potential for a ‘programme’ of ICA reviews for Category 5 firms

    • Electronic Reporting [Deadline for comments on OCP 8/13 is 1 November 2013]

    • PRA intend to develop a proportionate NDF regime once SII position is clearer

    Feedback and Looking Ahead


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