FSA head of insurance regulation David Strachan has hit back at criticisms over the introduction of its realistic reporting regime.
Speaking at the Institute of Economic Affairs annual conference, Strachan said: “Bold reform was needed and bold reform is being delivered.
“This has revealed all sorts of things that firms had either overlooked or had preferred to keep out of sight, out of mind and ultimately off the balance sheet.
“And while this will undoubtedly make the unprepared squint and even wince, any short-term pain is clearly outweighed by the long-term gains.”
Strachan argued that it was hardly a controversial move to introduce a requirement for companies to properly evaluate their liabilities and ensure they have sufficient reserves to cover them.
He described the change as “uncomfortable to say the least” for some firms, but added: “Again, it is important to remind ourselves that the aim of this reform is no more complex than to ensure that firms ultimately have enough capital to be able to honour the promises they make to their customers.
“Clearly, it is right – even overdue – to have a regime which seeks to ensure just that.”
“Collectively we are, without doubt, in the midst of a period of unprecedented change in the way that insurance firms are regulated.
"What all of us in this room and beyond are witness to is nothing short of wholesale root and branch reform,” Strachan told the conference.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
