The London Market Group (LMG) has published two documents focusing on what the UK government and the country’s regulators need to safeguard the London Market’s position.
Caroline Wagstaff, CEO of the LMG, said: ‘We are delighted that the Government is proposing to include a competitiveness objective in the new Financial Services and Markets Bill, but words are not enough. If there is any chance of the reforms succeeding, they must ensure that the regulators can be held accountable for delivering on these new duties. For this bill to change the way the regulators operate it needs ‘teeth’.”
She added: “Our concern at the moment is that this might be treated as a tick box exercise rather than something which can seriously support UK competitiveness. For us, the success of this development hinges on establishing an approach to regulation that genuinely focuses on risk and sets the right rules for the right firms in the right way. It also rests on measuring change. So, our second document offers some practical suggestions by which this competitiveness agenda can start to be established and measured.”
There are five points that the LMG have posited will help safeguard the market’s position.
These are recognising the nature of the large complex risks we cover and the sophisticated corporate buyers we serve, through a more proportionate approach to regulation; ensuring that the London Market remains the most attractive home for large risks through an international competitiveness duty for UK regulators; making London a natural home for foreign (re)insurance companies by reforming the Solvency II regime; increasing the choice of buyers and growing the market by developing and promoting a UK captives; and gaining access to emerging markets around the world, to help them build resilience against natural disasters and climate change events through trade negotiations, regulatory dialogues and market promotion.
Wagstaff continued: “These suggestions include getting the basics of operational effectiveness right to give a platform to build on, however, it should also involve setting the tone for future ‘activity-specific’ regulation by increasingly considering proportionality in current and ongoing activity. A focus on proportionality will help lay the groundwork for the growth of new entrants, new business models and the wealth of new investment opportunities that exist.”
