1: Overview
1.1 In 2022/23, the PRA Practitioner Panel (Panel) continued to represent the interest of practitioners by considering and providing appropriate scrutiny on significant PRA policy and regulatory developments. This has been achieved through regular discussions with relevant PRA and wider Bank of England policy leads, senior management, and Prudential Regulatory Committee (PRC) members at Panel meetings.
1.2 The Panel’s established approach of engagement at an appropriate stage of the policy development process is central to its ability to add value to the PRA’s approach to policymaking. The Panel is committed to continuing to provide challenge and advice to the PRA, ensuring that practitioners’ views are appropriately considered.
1.3 The Panel has a sub-committee, the Insurance Sub-committee (Sub-committee),footnote [1] which provides a dedicated forum to discuss the PRA’s policies and practices related to the insurance sector. Like the Panel, the Sub-committee follows the approach of engagement at an appropriate stage of the policy development process to enable added value to policies. Additionally, information is shared between the Sub-committee and the Panel.
2: PRA Practitioner Panel
Panel membership – as at March 2023
- Chris Bannister, General Manager, Europe and Americas, Westpac Banking Corporation – UK Finance
- Mary-Anne Daly, Chief Executive Officer, Cazenove Capital, UK – Personal Investment Managements & Financial Advice Association (PIMFA)
- Martin Fisher, Head of Northern Ireland, Irish League of Credit Unions – NI Credit Unions
- Javier Faiz, Partner, Banking & Capital Markets, Ernst & Young – The Institute of Chartered Accountants in England and Wales (ICAEW)/The Institute of Chartered Accountants of Scotland (ICAS)
- Vicky Davies, Chief Executive Officer, Northern Bank Limited – UK Finance
- Bruce Fletcher, Chief Risk Officer, NatWest Group and NatWest Holdings – UK Finance
- Tonia Lovell, Director of Risk Management and Society Secretary, Bath Building Society – Building Societies Association
- Muir Mathieson, Deputy Chief Financial Officer and Treasurer, Nationwide Building Society – Building Societies Association
- Ruairi O’Healai, Managing Director, Morgan Stanley Investment Management – The Investment Association
- Helen Pickford, UK Chief Financial Officer, Zurich Insurance Group – Association of British Insurers (Practitioner Panel Chair)
- William Smith, Managing Director, Head of International, BMO Capital Markets – Association of Foreign Banks
- Andrew Stoker, Chief Financial Officer, Rothesay – Association of British Insurers
- Rakesh Thakrar, Chief Financial Officer, Phoenix Group – Association of British Insurers
- Vacant (nomination process in progress) – GB Credit Unions
2.1 As outlined in the Panel’s Terms of Reference, members serve for a three-year term with the opportunity of extending this for an additional term. During the reporting period, Tim Harris’ second term came to an end. The Association of British Insurers nominated Rakesh Thakrar in replacement. In addition, Mark Rhys completed his second term and Javier Faiz was nominated by the ICAEW/ICAS to take Mark’s seat on the Panel. Robert Kelly also completed his second term – the nomination process for a member to replace Robert for GB Credit Unions is in progress.
2.2 During the reporting period, Debbie Crosbie stepped down from the Panel. She was replaced by Vicky Davies as a UK Finance representative. Andy Nelson also stepped down, with Muir Mathieson taking that seat as a Building Societies Association representative. Andrew Stoker joined the Panel as a representative of the Association of British Insurers, along with Bruce Fletcher representing UK Finance. They replaced Aki Hussain and Francesca McDonagh respectively, who stepped down during the previous reporting period.
2.3 Helen Pickford has commenced a second term as Panel Chair. The appointment of a Deputy Panel Chair is in progress.
Panel engagement with the PRA
2.4 The Panel met five times during the reporting period. Meetings have been hybrid allowing for attendance either in person or via videoconference. Attendance was strong, with an average 84% attendance at meetings over the reporting period.
2.5 As in prior years, Panel members were provided with briefings from, and had discussions with, relevant PRA policy leads. Meetings were attended by Executive Directors from the PRA and policy areas of the Bank of England (the Bank), external PRC members and occasionally, the PRA Chief Executive Officer (CEO). Key outcomes and insights from these meetings continue to be fed back to relevant decision makers and policy leads within the PRA and the Bank, contributing to the policymaking process.
2.6 The PRA CEO continues to hold bilateral meetings to discuss the Panel’s views and other relevant issues with the Panel Chair.
Examples of items considered by the Panel and impact on the PRA
2.7 The following items are examples from the reporting period of where the Panel’s views were sought and it provided significant added value to the policy process.
Issue | Description |
|---|---|
Diversity and inclusion (D&I) in PRA-regulated firms | The topic of D&I in PRA-regulated firms returned to the Panel and views were sought on a plan to consult on proposals aimed at improving D&I across firms. The Panel provided its feedback on aspects including proportionality, accountability, and targets. |
The use of artificial intelligence (AI) by PRA-regulated firms | The Panel was asked for input into a planned discussion paper (DP) about the use of AI by PRA-regulated firms. The Panel provided insight into the increasing use of AI across the industry and suggested potential areas of importance to draw out in the paper. |
The prudential liquidity framework: Supporting liquid asset usability | The Panel provided its feedback on a DP on liquid asset usability and the factors underlying the reluctance of banks to draw on their stocks of high-quality liquid assets when facing unexpected liquidity demands. The Panel reflected on the possible drivers, and what could be done to address the issue. |
Model risk management | The Panel considered a proposed set of model risk management principles for banks, building societies, and investment firms, which were planned for consultation. It provided views on aspects including scope, proportionality, and accountability. |
Ease of exit: solvent wind-down for non-systemic firms | The Panel was asked for views on a draft supervisory statement relating to the solvent wind-down of non-systemic firms due to be consulted on. It discussed matters including barriers to exit and timeframes. |
Credit unions – proposed changes to the regulatory framework | The Panel discussed proposals on changes to the regulatory framework for credit unions, providing feedback on the range of permitted investments and risk management considerations. |
Panel forward agenda
2.8 The Panel is scheduled to meet six times in the 2023/24 reporting period. Hybrid meetings are being held, with Panel members either attending in person at the Bank offices or via videoconference. The forward agenda will continue to be shaped by Panel members, and the PRA Executive and Senior Management Team. The focus of the agenda will continue to include items that are at an early stage of policy development; however, some topics discussed during the course of the reporting period are expected to return to the Panel as they continue to develop. The agenda will also include any emerging and urgent issues that would benefit from a Panel discussion, as determined by the Panel or at the request of the PRA.
3: Practitioner Panel Insurance Sub-committee
Sub-committee membership – as at March 2023
- Andrew Chamberlain, Chair of the Actuarial Standards Committee of the International Actuarial Association – Institute and Faculty of Actuaries
- Paul Corver, Director, Insurance & Reinsurance Legacy Association (IRLA) – IRLA
- Peter Green, Chief Executive, Healthy Investment – Association of Financial Mutuals
- Neil Griffiths, Chief Risk Officer, Dale Underwriting Partners – Lloyd’s Market Association
- Charlotte Jones, Group Chief Financial Officer, Aviva – Association of British Insurers
- Patrick Nolan, Regional Chief Risk Officer, EMEA, Chubb – International Underwriting Association
- Helen Pickford, UK Chief Financial Officer, Zurich Insurance Group – Association of British Insurers
- David Sansom, Chief Risk Officer, Lloyd’s – Lloyd’s
- Andrew Stoker, Chief Financial Officer, Rothesay – Association of British Insurers (Sub-committee Chair)
- Rakesh Thakrar, Chief Financial Officer, Phoenix Group – Association of British Insurers
3.1 Similar to the Panel, members serve for a three-year term with the opportunity of extending this for an additional term. During the reporting period, Tim Harris’ second term came to an end. The Association of British Insurers nominated Rakesh Thakrar in replacement. Tim Harris served as Chair of the Sub-committee and Andrew Stoker, who had joined the Panel and Sub-committee last year, took over as chair.
3.2 Andrea Montague was appointed to, but later stepped down from, the Sub-committee during the reporting period. The Association of British Insurers nominated Charlotte Jonesfootnote [2] to replace Andrea.
Sub-committee engagement with the PRA
3.3 The Sub-committee met three times within the reporting period via hybrid meetings. Attendance was strong, with on average 89% attendance at meetings over the reporting period. Similarly to the Panel, members were provided with briefings from, and had discussions with, relevant policy leads, and meetings were attended by Executive Directors and Directors from the PRA, as well as external PRC members.
Examples of items considered by the Sub-committee and impact on the PRA
3.4 The following items are examples from the reporting period of where the Panel’s views were sought, and it provided significant added value to the policy process.
A UK regime for captive insurers? | The Sub-committee discussed the arguments about whether a UK captive insurance regime might be beneficial in future, and if so, how the UK might seek to attract captive insurers to establish in the UK. Also, if it were to be a priority, what the principles behind a prudential regime might look like. |
Financing the transition to net zero – challenges for the insurance industry | The Sub-committee provided preliminary thinking into what role the UK insurance sector could have in financing the transition to net zero carbon emissions and the possible barriers to fulfilling that role. |
Solvency II reforms | The Sub-committee considered two papers related to the Solvency II reforms package that HM Treasury consulted on in 2022. This included a discussion in which the PRA looked to build on the experience of its Quantitative Impact Study on how best to take forward future engagement with industry participants, and a separate paper on potential future opportunities for other areas of reforms to the Solvency II regime to help inform the PRA’s medium-term planning. |
The Sub-committee gave early feedback on the possibility of extending the proposed high-level principles for model risk management for banks, building societies, and investment firms, across the insurance sector. It reflected on the challenges there might be in applying any proposed regime generally and because of sectoral differences. | |
Protection gaps in non-life insurance | The Sub-committee provided insight into where it saw the greatest risk of material protection gaps existing or emerging, why they might arise, and how industry, government, and the regulators could best work together to develop solutions. |
Sub-committee forward agenda
3.5 The Sub-committee is scheduled to meet three times in the 2023/24 reporting period. The forward agenda is, and will continue to be, shaped by Sub-committee members and the PRA Executive and Senior Management Team. The focus of the agenda will include items that are at an early stage of policy development.
The Financial Services and Markets Bill, currently being passed through Parliament, will establish a PRA Insurance Practitioner Panel, placed on a similar statutory footing as the PRA Practitioner Panel.
Charlotte Jones was appointed to the Insurance Sub-committee in March 2023.