The Bank of England’s (BoE) appointment of Sam Woods as executive director for insurance supervision has met with a guarded welcome from the International Underwriting Association (IUA), which expressed concerns about oversight of the sector.
“It is encouraging that the position of the BoE’s Executive Director for Insurance Supervision has now been filled, following the departure of Julian Adams in August last year, and the IUA looks forward to working with Sam Wood,” commented Dave Matcham, the IUA’s chief executive (CEO).
“However, the IUA is concerned that the regulatory regime for insurance in the UK needs more staff with industry experience gained from holding senior positions in the sector.
“This has been a worry since the establishment of the current system which shared supervision of insurers between the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA) and the BoE.
“Insurance figures are not well represented on senior committees such as the PRA board and the BoE’s financial policy committee. This also means that, while there are many very talented and highly skilled regulators, there is a lack of insurance-specific expertise from which the BoE is able to select senior executives.
“The insurance sector is quite different from banking with different supervisory requirements. It does not present the same systemic risk to the wider economy. Given the wide range of responsibilities shouldered by senior regulators it is vital that they maintain an intimate understanding of insurance matters.
“The treasury growth action plan sets ambitious goals for growth for the insurance sector, a challenge that the IUA is supporting very strongly. The general insurance industry in particular needs to be given support to ensure that the London market’s competitiveness is not compromised by an inappropriate application of banking regulatory methods.”
Woods joined the Financial Services Authority (FSA) in 2011, which was then the regulator for the UK financial sector and transferred to the BoE in 2013 with the integration of the PRA. He most recently served as director for financial stability strategy and risk, and was previously director for domestic UK banks supervision. He takes up the new position effective April 7 2015.
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