Search is now on for a chief executive and a chief financial officer
A delay in regulatory approval could prevent Flood Re from meeting its summer 2015 deadline.
At an Insurance Institute of London lecture at Lloyd’s this afternoon ABI deputy director general Huw Evans said that June 2015 was still the target deadline. But he admitted it was a challenging date and the project would require full authorisation by the FCA and PRA.
Evans’s comments follow news reports that Flood Re’s launch could be delayed until 2016.
Evans said: “The full authorisation of Flood Re by the FCA and PRA is a major task and is absolutely critical to the time delivery of Flood Re. If there is anything that impacts on the ability of Flood Re to be authorised it will in turn have a knock-on effect on when Flood Re can start.
“When we reached the agreement with the government back in June we agreed we would aim for a start date of June 2015 and that is still the target date.
“All said it is a challenging date and we need to meet the regulatory requirements. The insurance regulatory process and everything else needs to come on track to meet that deadline, but that is still the time we are working towards.”
One of the main regulatory requirements for Flood Re is that it will have to be Solvency II compliant and must have a minimum and solvency capital requirement.
The search is also now on for a chief executive and chief financial officer to head Flood Re. The chief executive position is expected to be in place by the end of the first half of 2014.
Flood Re will be a public/private partnership. It will be industry-owned but classified as a public body, because the levy paid by householders will be classified as a tax.
The chief executive will be accountable to parliament, but all key operational decisions, such as underwriting, pricing and claims, will be taken by the industry.
Evans said: “The CEO will have vital work to take Flood Re through to its final stages.”
As part of its structure, Flood Re will buy reinsurance cover that pays losses between £250m and £2.4bn. Flood Re will be responsible for paying claims below the £250m reinsurance limit.
The broker placing the reinsurance cover is expected to be appointed in the second quarter of 2014.