Insurers believe the FSA's Individual Capital Adequacy Standards (ICAS) have helped embed a risk-based approach to how much capital is required by firms, an ABI study has found.
The study questioned insurers over their experience of implementing ICAS since the FSA regime came into force.
Peter Vipond, ABI director of financial regulation and taxation said as a result of the ICAS rules: “Customers are being properly protected without prices being driven up, which would result if firms were required to hold additional, unnecessary capital.
“The ABI is keen that the European Commission draws on this positive experience in establishing new capital adequacy standards for the EU through the Solvency 2 Directive.
“The firms also stress the importance of improved feedback from the FSA in the ICAS process. We are continuing to discuss this issue with the FSA, which has recognised the need for such dialogue”.
