Too many regulatory requirements could see insurers fail to meet the Financial Services Authority's ...
Too many regulatory requirements could see insurers fail to meet the Financial Services Authority's (FSA) deadline, according to the Tillinghast business arm of risk and financial management firm, Towers Perrin.
It has warned that demands issued by the FSA, launched in a bid to help insurers improve their risk management practices, may prove to be too demanding for some companies.
Following FSA reviews, focusing on operational and credit risk, the regulator sent out letters to all chief executives of life firms, pointing out "areas of weakness", which it felt required"close attention from senior management."
As a part of this, the regulator urged firms to alert it to any areas where there is potential for discrepancies between terms and conditions in policyholder documents, the way in which companies are treating policyholders and the amount of capital they are holding to cover these liabilities.
Findings from the reviews, alongside proposed actions for change, have to be sent to the FSA by the end of November.
However, Tillinghast believes that some insurers will find it hard to address their shortcomings in time for the November deadline. Regardless, the regulator appears adamant in pushing this issue. "It is clear that the Financial Services Authority is keen to persuade life insurers to address what it feels are common areas of weakness in their business," said Ian Carey, consultant at Tillinghast.
