The following Financial Services guidance note provides comprehensive and up to date legal information covering:
As the prudential regulator for insurers, banks and also certain investment firms that could present significant risks to the stability of the financial system, the Prudential Regulatory Authority (PRA)’s supervision of insurers is framed in a different way to its supervision of banks and investment firms, given the differing nature of the risks and liabilities each sector faces.
There are common themes that run throughout the PRA’s supervisory approach. The PRA’s supervisory model is driven by its primary objective is to promote the safety and soundness of regulated firms. At the core of the model is a presumption that, unlike the Financial Services Authority (FSA), the PRA will not solely rely on the judgment of the management of firms it supervises, although responsibility for financial soundness remains with each firm’s management, board of directors and shareholders and not the PRA.
The PRA’s supervisory approach builds on the recent approach undertaken by the FSA and is not radically different. Three key areas of the model are:
The PRA will use a risk assessment framework focusing a number key elements:
the potential impact on the financial system of a firm coming under stress or failing;
the impact on the viability of a firm’s own business model of the overall external risk environment; and
the firm’s overall safety
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