There will be “no bonfire” of UK insurance regulations post-Brexit, but the Financial Conduct Authority (FCA) believes it is an opportunity to consider a move towards more principle-based, rather than detailed, rules, according to its director of general insurance and conduct specialist supervision.
Addressing the British Insurance Brokers’ Association Conference this week, Karina McTeague also said the FCA continues to work with European authorities to reduce no-deal Brexit risks, and told the audience she has been impressed by the UK insurance industry’s approach to Brexit.
However, she is less impressed by the UK insurance industry’s response to other regulatory issues.
“Stronger prudential and conduct regulation has been built globally over the last ten years. Brexit is not going to significantly impact this global initiative. There will be no bonfire of our rules in any post-Brexit scenario. However, there will be opportunity for the UK to consider a regulatory system based more on principles and less on detailed rules,” she said.
She added that the FCA is planning for a range of Brexit scenarios and is working with pan-European authorities to mitigate the potential harms caused by a no-deal Brexit. “We have been taking the lead in preparing for a transition period and envisaging a post-Brexit regulatory environment,” Ms McTeague said.
She said there are still a number of regulatory questions to be answered on a range of Brexit topics, not least regulatory equivalence with the EU.
The regulator said the FCA is clear that any equivalence arrangements must have substance and deliver a framework that provides predictability for financial markets, their firms and regulators.
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