PRA drops planned London market reporting reforms

The Prudential Regulation Authority (PRA) has dropped planned changes to the regulation of third-country branches in the London market.

The announcement of the initiative’s cancellation follows criticism of the plans from London market participants, including the International Underwriting Association (IUA).

The PRA had initially announced it would make updates to its modification by consent process, which is designed to reduce the reporting burden on smaller branches.

The planned changes would have meant that the larger firms in this bracket would have been moved to a full reporting schedule, a decision the IUA warned “could be costlier than envisaged”.

However, the PRA dropped the plans after an internal analysis found that “quarterly reporting from larger branches delivers limited additional supervisory value relative to the costs that would be incurred”.

Reporting burden

Nafisah Hussain, director of public policy at the IUA, said: “I am delighted that the PRA has taken on board our comments and agreed not to unnecessarily increase the reporting burden for our members.

“This move clearly demonstrates the value of an effective consultation process and the importance of regulators and industry working together to develop a robust but proportionate and efficient supervisory regime.

“In addition to promoting the safety and soundness of the firms it regulates, the PRA also has a statutory objective to enhance competitiveness and growth. This decision will help ensure that the London market remains an attractive location for international insurers.”