GIM1170 - The UK insurance market: regulation and supervision
The diversity of forms of insurer operating in the United
Kingdom market reflects the historical development of the market,
the evolution of different forms of business organisation in the
UK, and the development of the regulatory framework.
In recent years in the UK, insurers have been regulated and
supervised by the DTI and the Treasury, and are now regulated and
supervised by the FSA.
The language of the regulatory framework has changed over the
years. The Insurance Companies Act 1982 applied to authorised
‘insurance companies’. The statute which replaced it,
the Financial Services and Markets Act 2000 (FSMA 2000), refers to
‘authorised persons’ who may carry on ‘regulated
activities’, of which the ‘effecting’ or
‘carrying out’ of contracts of insurance is one.
Authorised persons are either those who have received
permission under Part IV FSMA 2000 from the FSA, or an EEA or
Treaty firm which qualifies for permission under Schedules 3 or 4
to the Act. In essence these are firms which are subject to
regulation in their home State.
Authorised persons must also meet the FSA’s
“threshold conditions”, one of which for insurers is
the person must be a body corporate, a registered friendly society
or a member of Lloyd’s.
More details on the regulatory framework are given in
GIM3000+.
