Clifford Chance
Receive insights and opinions from our Global Insurance Group on the latest insurance trends, regulatory changes and developments, including the role of new technologies, shaping the global insurance market.
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Increasing the competitiveness of the UK ILS regime: PS12/22 indicates a change in approach by the PRA
The PRA has responded to calls to make improvements to the UK's regulation of Insurance Special Purpose Vehicles ("ISPVs") to make the UK more competitive as an international ILS destination.
James Cashier Director of Insurance 30 January 2023
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New Rules: FCA Consumer Duty consultation
On 7 December 2021 the UK Financial Conduct Authority ("FCA") published its second consultation on its proposed new Consumer Duty that would set higher expectations for the standard of care that firms provide to their retail consumers.
James Cashier Director of Insurance 6 January 2022
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The PRA's Insurance Supervision: 2022 priorities
On Wednesday 12 January 2022, the Prudential Regulation Authority (PRA) published a 'Dear CEO' letter from Anna Sweeney and Charlotte Gerken, joint executive directors of insurance, detailing focus areas for 2022. The letter was sent to all insurers, including third-country branches, supervised by the PRA and contains a high-level 'to do list' for firms both in the general and life sector
Amera Dooley Knowledge Director 18 January 2022
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The Brexit Freedoms Bill and changing retained EU law
To mark the second anniversary of Getting Brexit Done, the Government announced on 31 January that it would bring forwards a new Brexit Freedoms Bill (the Bill) to make it easier to amend 'retained EU law', that is EU-derived legislation, rights and principles preserved at the end of the Brexit transition period under the European Union (Withdrawal) Act 2018 (EUWA).
Amera Dooley Knowledge Director 16 February 2022
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Practical steps for preparing for Solvency UK
On Monday 21 February, City Minister John Glen delivered a speech to the Association of British Insurers' (ABI) Annual Dinner in which he revealed details of the Government’s Solvency II reforms, months before the formal consultation process (expected in April). This was followed on Friday 25 February, by an article by John Glen, reiterating the Government's intention to seize the opportunity to reform Solvency II to create "Solvency UK". The proposed changes should help attract new entrants to the UK market and capital reforms will assist UK insurers to invest in the Government's post-Brexit vision of UK growth and innovation.
Emma Eaton Senior Associate 28 February 2022
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Increased Scrutiny: The Updated Regulatory Approach to Part VII Transfers
Since the Financial Conduct Authority (FCA) published its guidance on Part VII Transfers in 2018, they have seen a record number of Part VII Transfers driven by Brexit-related reorganisations and increased M&A activity.
Nancy Li Senior Associate 11 April 2022
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Updated regulatory guidance on part VII transfers for companies in run off
After last year's consultation exercises, the PRA and FCA have now finalised updated guidance on Part VII transfers (PRA Policy Statement 1/22 and FCA Guidance FG22/1, respectively). This post focuses on a provision in the PRA guidance which is of particular interest to companies which are in run off.
Hilary Evenett Senior Director 31 May 2022
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Examining the Climate Biennial Exploratory Scenario report results from an insurance perspective
On 24 May 2022, the Bank of England (BoE) published the results of its first Climate Biennial Exploratory Scenario (CBES), the BoE's first climate stress test and serves to boost the central bank's climate credentials.
Amera Dooley Knowledge Director 18 July 2022
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FIG M&A Activity sees global slow-down after record highs
2021 was a record-breaking year for financial institutions M&A with deal volume and values across the banking, insurance and asset management sectors reaching new highs. At the outset of the year 2022 was predicted to see a continuation of this high level of activity, but with a backdrop of geopolitical instability following Russia's invasion of Ukraine and a deteriorating macroeconomic environment with high inflation and increasing interest rates, M&A activity has in fact seen a broad-based decline in the first half of 2022. However, whilst activity has fallen from the extraordinary highs of 2021 each of the banking, insurance and asset management sectors have nonetheless seen notable transactions.
Fergus Grady Senior Associate 26 September 2022
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Insurance inspired by nature
Traditionally, insurance is seen as a mechanism to absorb shocks and compensate unexpected events. However, insurance can have an important role in protecting natural assets and being proactive in the fight against climate change.
Nancy Li Senior Associate 10 November 2022
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Recent Court of Justice of the European Union decision emphasises the broad scope of IDD
The case was taken by a German consumer association against TC Medical Air Ambulance Agency GmbH ("TCMA").
Juan Valcárcel Abogado 14 November 2022
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Governance failings – takeaways from MS Amlin fine
The £9.7 million fine imposed on MS Amlin Underwriting Limited (MSAUL) by the PRA should prompt Lloyd's managing agents and insurers to review their risk management and governance systems and consider their approach to regulator engagement.
Beth Eyre Lawyer 17 November 2022
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Assessing the impact of rising interest rates, inflation, LDI strategies, and regulatory reform on the UK insurance market
The Bank of England (BoE) raised interest rates by 75 basis points to 3% at the beginning of this month, the biggest increase in 33 years. The BoE provided unusually direct guidance on the UK's economic prospects in the press conference that followed, stating that the outlook was "very challenging" and that additional interest rate hikes might be required for inflation to sustainably return to the target 2%.
Amera Dooley Knowledge Director 25 November 2022
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Transitioning to Solvency UK - the Edinburgh Reforms and the Solvency II Review: Response
On 9 December, the Chancellor of the Exchequer Jeremy Hunt unveiled the “Edinburgh Reforms” for UK financial services, which constitutes a plan to drive growth and competitiveness in the sector. Among the plans of the UK government is a commitment to implementing the Solvency II reforms over the course of 2023.
Jack Gilbert Lawyer 14 December 2022
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The outlook for the UK life insurance sector looks vibrant
Over recent months we have seen a variety of developments which point to the UK life insurance sector offering an increasingly attractive opportunity for third party investment as well as for new entrants into the market.
Imogen Ainsworth Partner 22 February 2021
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Lloyd's ILS platform: A good result for Lloyd's and the UK ILS market
Lloyd's announcement last month that it has obtained approval from the PRA to establish its own ILS platform is a big step for the Future of Lloyd's capital strategy and also potentially provides a significant boost to the UK ILS market.
James Cashier Director of Insurance 1 March 2021
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Responsible Innovation - Why it matters to the insurance sector
The last twelve months has seen a proliferation of legal, regulatory, academic and policy papers about innovation, in particular the use of Artificial Intelligence ("AI"). At the heart of the debate is "responsible innovation", a concept that incorporates social principles such as ethics, transparency, trustworthiness and accountability in relation to complex technology.
Emma Eaton Senior Associate 23 March 2021
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Impact for insurers: The FCA's newly proposed consumer duty Following a statutory mandate under the Financial Services Act 2021, the Financial Conduct Authority ("FCA") published a consultation paper in May proposing a new Consumer Duty that would set higher expectations for the standard of care that firms, including insurers and intermediaries, provide to their retail consumers. 7 June 2021 Read more
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ICS Version 2.0: Moving towards a global Insurance Capital Standard?
ICS version 2.0 is the consolidated group-wide reference standard for a globally comparable risk-based measure of capital adequacy for IAIGs. It will be applied by IAIS members over a five-year monitoring period with some members, including the EU-27 through coordination by the European Insurance and Occupational Pensions Authority ("EIOPA"), from January 2020.
Disha Gulati Senior Associate 21 June 2021
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Insurtech: Progress for Smart Contracts?
There are questions about the legally binding nature of smart contracts, such as how their terms are interpreted, how to deal with issues such as mistakes in the coding of smart contracts and the remedies that are available when a contract fails to perform as intended.
Emma Eaton Senior Associate 26 July 2021
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Open Insurance: An opportunity for consumer-centric innovation
Following the success of open banking, the UK Government, the FCA and the financial services industry have been considering the "potentially transformative benefits" for insurers and customers alike that could come from open finance, including open insurance.
Nancy Li Senior Associate 5 July 2021
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EU publishes Solvency II reform proposals, including a new Recovery and Resolution Directive
On Wednesday 22 September 2021, the European Commission announced plans to reform the Solvency II regime. The review allowed the Commission to reflect on the overall effectiveness of Solvency II, including during the Covid-19 crisis.
Amera Dooley Knowledge Director 30 September 2021
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HM Treasury Consultation: Insolvency Arrangements for Insurers
The government is currently consulting on a series of "targeted" amendments to existing insolvency arrangements for insurers in the hope of enabling UK authorities to better manage an insurer in distress.
Amera Dooley Knowledge Director 6 September 2021
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Activist investors aim at UK insurers in pandemic rebound
Historically, aggressive shareholder activism has been relatively rare for UK financial institutions. However, in recent years there has been a notable increase in the number of campaigns made by activist investors across all industries, with insurers undoubtedly a current area of focus.
Fergus Grady Senior Associate 6 October 2021
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The new EU insurance recovery and resolution directive: reducing risk and reinforcing resilience
Although the UK may want to step up the pace of negotiations with the EU on a FTA, the Coronavirus pandemic has potentially disordered the government’s economic and political calculations. A no-deal outcome, which once seemed very unlikely, now seems entirely plausible.
Hilary Evenett Senior Director 5 November 2021
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The future of UK financial services and the enhanced FSMA model
On 9 November 2021, HM Treasury (HMT) published its latest consultation on the Future Regulatory Framework (FRF) Review. The FRF Review aims to support the government's vision of the UK as a globally competitive financial services hub and complements several other reviews currently underway. This includes the government’s review of Solvency II for which a Call for Evidence was published in October 2020 with further consultations expected in 2022.
Amera Dooley Knowledge Director 8 December 2021
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The regulatory push on D&I
Diversity, particularly gender diversity, has been on the agenda for both firms and regulators for a number of years. Over the last two decades, much has been done to promote women into senior positions, however there has been increasing recognition that focusing on one type of diversity is not enough.
Nancy Li Senior Associate 20 December 2021
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Accelerating changes in the year ahead: What to look out for in 2020
As 2020 kicks off in earnest we are looking ahead at the key legal and regulatory developments facing the London Market over the next 12 months.
James Cashier Director of Insurance 9 January 2020
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Brexit – the UK-EU deal on the future relationship needs to go further than just equivalence
After years of uncertainty, MPs have now given their final backing to the Withdrawal Agreement Bill.
For insurers, however, this will not mean an end to questions over the potential impact of Brexit.
Amera Dooley Knowledge Director 23 January 2020
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British insurers in Spain face the realities of a hard Brexit
A muddled disentangling of the UK from the EU's legal framework will have numerous consequences for British insurers operating in Spain.
Fernando Irurzun Partner 15 October 2020
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Climate Change in the 2020s: The decade for insurers to lead
The 2020s will be a decisive decade in the race to deal with climate change and insurers may well play a key role in deciding the outcome of these efforts.
Cheng Li Yow Partner 7 February 2020
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Operational Resilience: the new regulatory focus on business services
Over the last few years the UK regulators have been focused on introducing a stronger regulatory framework to promote the operational resilience of firms, including insurers. This comes against a backdrop of firms battling an increasing number of operational threats such as cybercrime and large scale technology changes.
Nancy Li Senior Associate 6 March 2020
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Coronavirus, Aggregation and Reinsurance
The Covid-19 pandemic is likely to give rise to questions as to the extent to which losses may be aggregated for reinsurance claims.
Philip Hill Partner 7 April 2020
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Reinsurance: A useful tool for M&A run-off transactions
Reinsurance continues to be a mechanism to be taken into account when analysing how to structure M&A deals within the run-off sector.
Juan Valcárcel Abogado 16 April 2020
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UK Stewardship Code 2020 – FRC raises expectations for insurers on outcome-based reporting and ESG
The UK Stewardship Code 2020 is a complete revamp of the 2012 Code, creating tailored requirements for asset owners such as insurers.
Amera Dooley Knowledge Director 23 April 2020
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Coronavirus and the "value" of an insurance policy
On 1 May the FCA announced a series of statements and guidance to firms regarding the impact of Covid 19 on the insurance sector.
Ashley Prebble Partner 15 May 2020
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Looking Beyond Coronavirus
Businesses are beginning to assess their strategic priorities and changes to the landscape as they look to manage the impact of Covid-19 on their business.
James Cashier Director of Insurance 28 May 2020
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First hearing in FCA BI insurance coverage test case highlights issues for trial
At a day-long virtual hearing last week, the Court decided a number of important procedural issues including confirmation of the “test case” status of the claim against a group of eight insurers which the FCA hopes will resolve contractual uncertainty around BI policies as a result of the Coronavirus pandemic.
Baljit Rai Director of Insurance Litigation 25 June 2020
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Are insurers ready for Brexit?
Although the UK may want to step up the pace of negotiations with the EU on a FTA, the Coronavirus pandemic has potentially disordered the government’s economic and political calculations. A no-deal outcome, which once seemed very unlikely, now seems entirely plausible.
Amera Dooley Knowledge Director 24 July 2020
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Working from home: the expectation for technological transformation
The large-scale move to remote working has pushed the insurance sector, along with many others, to innovate and deliver digital and remote solutions in order to maintain operational resilience and avoid business interruption.
Imogen Ainsworth Partner 9 July 2020
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'Falling back on the WTO': No deal implications for the UK insurance sector
A no-deal Brexit looms large again after Michael Barnier, the EU's top negotiator, warned of 'no progress' on key issues at last month's trade talks.
Amera Dooley Knowledge Director 6 August 2020
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Distinguishing the Facts of the Legal & General Part VII Transfer
The recent High Court approval of a Part VII transfer between Legal & General Assurance Society ("LGAS") to ReAssure suggests the interventionist approach the court adopted in the Prudential Assurance Company to Rothesay Life transfer could be limited in its scope to the facts of that case.
Amera Dooley Knowledge Director 17 September 2020
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Insure the future
The number of new insurance companies entering the UK market remains stubbornly low. This article looks at how the PRA proposes to support insurtechs in particular to become UK authorised insurers.
Emma Eaton Senior Associate 3 September 2020
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Government issues Solvency II call for evidence
On October 19, HM Treasury issued a "call for evidence", which seeks industry views on how to tailor Solvency II to better support the unique features of the UK insurance sector. A significant overhaul of solvency legislation is expected.
Amera Dooley Knowledge Director 29 October 2020
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The wider implications of the FCA test case
When Covid-19 began to spread across the UK, there was uncertainty as to whether non-damage business interruption insurance wordings actually provided cover for the effects of the pandemic. The Financial Conduct Authority ("FCA") thus sought to obtain court declarations in respect of coverage and causation issues under such policies, as part of a test case under the new Financial Markets Test Case Scheme.
Baljit Rai Director of Insurance Litigation 1 October 2020
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Regulatory expectations for good governance and culture underpin Lloyd's transformation
The drive for innovation must go hand in hand with strong oversight and a healthy culture.
Imogen Ainsworth Partner 12 November 2020
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The future regulatory framework review for financial services looks to post-Brexit future
Proposals seek to adapt and strengthen the existing Financial Services and Markets Act-based regulatory regime.
Amera Dooley Knowledge Director 26 November 2020
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Court of Appeal delivers boost to Part VII transfers
The High Court's decision in Rothesay/Prudential transfer provides insurers with much-needed clarity.
James Cashier Director of Insurance 11 December 2020
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