In the old and too familiar phrase, it must never happen again. With every financial scandal, every insurance company collapse, that old mantra is trotted out. This time, let's make it become real. Let's learn from this experience, putting in place the safeguards that should have been there this time.
Insurance Times is committed to putting time, money and resources into a campaign to overhaul the regulation of the industry. We're not looking to impose costly regulatory burdens on an industry which mostly runs itself well. Our aim is to stop rogue companies damaging themselves, their employees, their policyholders and the industry at large. Overleaf, we set out the failures which led to Independent's collapse – failures on the part of the directors, the auditors, the actuaries, the analysts, the ratings agencies and the regulators. The Insurance Times campaign objectives will, we believe, radically reduce the chance of another company following Independent's destructive route.
We need your support. Email our Regulation Overhaul Campaign (firstname.lastname@example.org) with ideas, suggestions and your knowledge of events leading to the Independent collapse. All information will increase the chances of success. Please, give us and the industry your support.
Campaign objectives: The buck stops with the regulator. The regulator should ensure solvency and proper management, not just monitor them. In return, the regulator needs more powers and more assistance from companies' professional advisors.
Auditors and insurers' audit committees should owe a duty of care to the regulator. Auditors and audit committees should be duty-bound to alert the regulator if they discover matters which call into question the solvency or proper management of the insurer. Copies of the management report from the auditors should go to the regulator.
Routine audit of claims handling and reserving policies and practices. The regulator should routinely send in auditors to inspect these aspects – where optimism and weak governance can hide.
Conflicts of interest should be removed. Auditors of insurers should not seek or accept consultancy work from insurers for whom they conduct work. Actuaries and auditors should not be insured by insurers for whom they act. A majority of non-executive directors should not be shareholders. Analysts recommending an insurer's shares should declare interests and any shares which they or their company have.
Strict corporate governance. The regulator should prescribe strict corporate governance processes, including separation of powers of chairman and chief executive, regular rotation of directors and strict timetables for audit.
Support us: write to Insurance Times or email email@example.com.