Moody’s has given its blessing to the government’s recognition that insurers have different regulatory needs to banks.

A white paper, issued last week, says that the proposed Prudential Regulation Authority will have a specific statutory objective relating to the insurance industry.

The rating agency has said in its latest Weekly Credit Outlook, published today, that the new approach will be regarded as a positive factor when the regulator is assessing insurers.

It says: “We believe that having a more proactive, forward-looking, and robust regulatory approach will reduce the risk of default in the sector and thus will be credit positive for the UK insurance industry.”

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