The PRA conducted six investigations into the regulatory reporting, risk management and controls of insurance firms last year, double that of 2016.
The figures, revealed in the Bank of England’s annual report published today (15 June), relate to Section 166 investigations by the PRA, the UK’s regulatory body which oversees companies’ prudential risk.
Overall, the cost of the probes for the entire financial services industry came in at around £6.3mn last year, up from £5.6mn in 2016, with the cost per review ranging from £40,700 to £2.3mn, with some of that burden shared by the companies under investigation.
While carriers received heightened attention from the regulator in the Bank’s 2017-2018 year of account up to the end of February, deposit takers and clearing houses appear to have been the greatest cause for concern, prompting seven investigations last year after zero activity in 2016.
The increased focus on insurance firms came amid a more general uptick in regulatory scrutiny on the sector from the UK’s authorities, including probes into the London wholesale broking market and an investigation into practices in the aviation sector.
As part of the probe into ‘informal’ information sharing in the wholesale sector, the FCA asked almost 50 questions around how the market functions.
One of those reads: “When competing for new business are you ever made aware, either formally or informally of the other broker firms the customer is approaching?”
It then immediately follows up by asking: “Are you ever made aware of the existing brokerage fees/commission or terms & conditions agreed by a prospective customer.”
The review comes amid a perceived crackdown on illicit information sharing in the market after a number of aviation brokers had their London offices raided by the FCA amid an investigation into antitrust complaints.