UK insurers returning to the office today will be working under a series of regulations introduced by the FSA which came into effect as the new year began.

The FSA said the prudential requirements would introduce a more risk-based approach to calculating capital by requiring firms to take an integrated view of the risks that they face as insurers.

According to the FSA, the capital held by insurance companies will be more closely matched to the risks of the business that they write.

General insurance companies will continue to meet the statutory solvency requirements, but will also provide a risk-based enhanced capital calculation to the FSA on a private basis.

In addition, all firms will be required to make their own assessments of their capital needs. These, in turn, will be used by the FSA to give firms individual capital guidance (ICG) reflecting the industry watchdog's own view of the capital required to support their individual business profiles.

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