Ch 10 Statutory Regulation Flashcards
Who is responsible for regulating the UK’s financial services industry?
Financial Conduct Authority (FCA)
Prudential Regulation Authority (PRA
Responsible for monitoring emerging risks to the UK financial system as a whole and providing overall strategic direction for rhe entire regulatory regime
FINANCIAL POLICY COMMITTEE (FPC)
PRC operates alongside the other 2 Bank committees
1.FPC and MPC (Monetary policy committee)
Who is responsible for conduct of business and market issues for all firms including insurers, and prudential and prudential regulation of small firms (e.g insurance brokers and financial advisory form)
FCA ( financial conduct Authority )
What is the primary objective of the Prudential Regulation Authority?
1.Promote the safety and soundness of the firms it regulated
2.Specific to insurance firm,to contribute to ensuring that policyholders are appropriately protected
It’s primary or secondary objective of PRA
To facilitate effective competition in the markets for service provided by PRA authorised firms
What is threshold conditions
Are the minimum requirements that firms must meet in order to be permitted to carry on regulated activities
What are the PRA’s threshold conditions?
A firms head office and “mind and management” must be in the UK
The firm to conduct business “in a prudent manner” and maintain the “appropriate financial and non financial resources
The firm to be “fit and proper” and appropriately staffed
The firm is capable of being effectively supervised
Risk assessment framework capture 3 elements
1.Potential impact
2.macroeconomic and business risk
3.Mitigating factors
What is the PRA’s framework called and what is it based on?
The Proactive Intervention Framework, made up of five stages based on the PRA’s judgement about the firm’s proximity to failure
Dual regulated firms
Society of Lloyd’s and Lloyd s management agents
FCA regulated firms
Lloyd’s members agent and Lloyd’s brokers
What is the PRA’s framework called and what is it based on?
The Proactive Intervention Framework, made up of five stages based on the PRA’s judgement about the firm’s proximity to failure
Who expects insurers to have a culture that supports their prudent management.
PRA (Prudential Regulation Authority )
all individuals working in an insurance Co should have what kind of management
Good prudential management
Who is a lead regulator of Lloyd’s as a whole
PRA (Prudential Regulation Authority )
Fca is allowed to use its product intervention powers in relation to which customers
Retail Customers
Common power available to FCA and PRA
Publish the fact that a warning notice had even issued about a firm as making a summary of the notice publicly available.
What is the FCA and PRA business handbook called ?
PRIN - Principles of Business
Annually FCA is required to report to
Government and Parliament
By whom FCA work is overseen
By a board appointed by the government with a majority of non executive directors
Requirement for FCA in the event of a regulatory failure
To make a report to the treasury about the event of a regulatory failure and where this failure was due to the FCA s actions.
What is the minimum amt of PI cover for a single claim that the FCA requires intermediary firms to have
Euro 1,300,380
Under solvency II, insurance cos must maintain enough capital to give them what level of confidence that they are able to cover their liabilities in the following 12 months
99.5%
Which UK regulator would authorise a new insurance Co
The prudential regulation Authority ( PRA)
What specific measure is uses to assess the financial strength of an insurer
Solvency margin
Under the certification regime, who determines teh fitness and propriety of an individual
The authorised firm
What is the maximum penalty for someone found guilty of tipping off a suspected person under the criminal justice act 1993
5 years imprisonment
An individual providing advice will need to follow the conduct of business of the
FCA
Who is responsible in an authorised firm for ensuring adequate money laundering systems and controls
The money laundering reporting officer
What is FCAs online system of monitoring authorised forms known as
GABRIEL
Which UK organisation has overall responsibility for promoting fair competition for the nebefot of the consumer
Competition and Markets Authority
