Chapter 1 Key Points Flashcards
what are the 3 main parts of the UK regulatory framework
the FCA, PRA and FPC
what does FPC stand for
financial policy committee
what is the FCA responsible for
conduct of business and market issues for all firms
prudential regulation of small firms (e.g. insurance brokers and financial advisory firms)
what is the PRA
sits within the Bank of England, responsible for the stability of important financial institutions (banks, building societies, general and life insurers)
who makes the PRA’s most important supervisory and policy decisions
PRC (prudential regulation committee)
what is the FPC
a committee of the bank of england
responsible for monitoring emerging risks to the financial system as a whole
provides strategic direction for the regulatory regime
how is coordination between the FCA and the PRA ensured
each CEO sits on the board of the other
what is the PRA’s approach to regulation
does not operate a ‘zero-failure regime’ but seeks to ensure that disruption to customers and to the financial system are minimised should any member firm fail, forward looking approach, imposes outcomes which insurers have to decide how to bring about
how are firms categorised by the PRA
basis of the amount of risk they bring to the PRA’s objectives, also supervised on this basis
what is a forward looking approach
assesses its objectives against both current and plausible future risks
what type of approach does the FCA take
risk based approach, focuses its attention on firms that pose the greatest threat to its objectives
what can the FCA do to products and financial promotions that it considers to pose an unacceptable risk to policyholders
can ban them
where are regulatory rules contained
PRA rulebook and FCA handbook
what is the key part of the FCA handbook for insurance
Insurance: Conduct of business sourcebook (ICOBS)
impact of regulatory regime
significant impact on underwriting function, firms must comply with the Principles for Businesses
what do regulators require from employees
to be competent to a level that is appropriate to their business, remain competent and have their competence regularly reviewed
what does the Consumer Duty require
firms to ensure their customers have good outcomes, relates to every part of the insurance process
what can assist when the customer is left dissatisfied in their dealings with an insurer
FSCS and FOS
what is the fscs
financial services compensation scheme
what is the fos
financial ombudsman service
