FCA supervisory approach and note to insurers
Produced in partnership with Marcus Bonnell and Charlotte Thompson of RPC
FCA supervisory approach and note to insurers

The following Insurance & Reinsurance guidance note Produced in partnership with Marcus Bonnell and Charlotte Thompson of RPC provides comprehensive and up to date legal information covering:

  • FCA supervisory approach and note to insurers
  • The FCA's approach to supervising firms
  • The FCA's supervisory framework
  • How will this affect insurers?

The FCA's approach to supervising firms

According to SUP 1A.1.4 G, the Financial Conduct Authority (FCA)'s regulatory approach aims to focus and reinforce the responsibility of the senior management of each firm to ensure that it takes reasonable care to organise and control the affairs of the firm responsibly and effectively, and develops and maintains adequate risk management systems. It is the responsibility of management to ensure that the firm acts in compliance with its regulatory requirements.

However, the FCA will also have regard to the principle that a burden or restriction which is imposed on a firm should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of the burden.

The FCA will adopt a pre-emptive approach, which will be based on making forward-looking judgments about firms' business models, product strategy and how they run their business, to enable the FCA to identify and intervene earlier to prevent problems crystallising. They hope this will contribute to the delivery against its objective to protect and enhance the integrity of the financial system.

When customer detriment does occur, the FCA will seek redress for consumers robustly. This will be done through a risk-based and proportionate supervisory approach.

The FCA's approach is based on the following principles:

  1. Forward looking and more interventionist

  2. Focused on