Insurance avoids heavy hand of FSA

In this extract from his first address to an insurance audience at the ABI’s annual conference, Lord Turner, chairman of the FSA, assures the insurance industry that it will not be subject to major regulatory reforms, although insurers will feel the impact of the financial crisis in the FSA’s new philosophy as it moves from a light touch approach to more intensive oversight and higher expectations of all regulated firms

In the banking industry, it is clear that there have been huge challenges, huge problems and a need for radical change. The Turner Review proposals, mirrored by other reports from across the world, amount to a revolution in our approach to the regulation and supervision of banks, investment banks and shadow banks. We need major changes in our approaches to capital adequacy, liquidity, hedge funds, remuneration, and credit rating agencies. We have extremely difficult issues to address in the regulation and supervision of large cross-border banks. And we need to decide whether changes in capital regulation of banks should be combined with changes in accounting approaches.