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Blog Post
Coronavirus – FCA Financial Resilience Survey
- By MICHAEL HANSON
- •
- 18 May, 2020
Relevance: All firms.
Action required: Awareness of potential survey request from the FCA (please review the content to ensure you would be able to complete, if asked).
A matter has been brought to our attention that will be of interest to all client firms;
• the FCA has issued a survey to a small number of general insurance intermediaries that is seeking information that may not be readily available.
In their request, the FCA states:
“…firms prudentially regulated by the FCA play an important role in supporting the functioning of the economy. During this time of stress, we expect firms to meet this responsibility by planning ahead to ensure the sound management of their financial resources. This includes taking appropriate steps to conserve capital and to plan ahead for how to meet potential demands on liquidity. We want to see firms continuing to operate in this challenging period. As part of our ongoing monitoring of the firms we regulate, we are writing to you to request information on some aspects of your financial resources.”
The survey has been sent to 300 general insurance intermediaries that have been selected “based on a review of the data we hold regarding the sector.”
In this instance, firms have been given just 1 week to respond to the survey.
The FCA has pointed out that it is not a mandatory requirement for a firm to respond to this survey. However, the FCA has also pointed out that a failure to respond “may influence our future interactions with your firm, in particular our assessment of your firm’s compliance with the Principles for Business. Principle 11 says that “a firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice”.”
We have attached to this newsletter a copy of the survey and a separate list of Frequently Asked Questions (FAQs) plus answers to show what information is being asked for. The survey is seeking financial information on income and expenditure, Risk Transfer arrangements and GWP, amongst other items.
The FCA is also suggesting that it should take “no more than five hours” to complete the survey!
We are unsure if this is just a one-off exercise but we feel it is better to be forewarned in case the FCA decides to widen its information-gathering and contact more firms accordingly.
As indicated previously, the FCA has stated:
“We are closely monitoring the coronavirus situation. We stand ready to take any steps necessary to ensure customers are protected and markets continue to function well. We are working closely with the Government, the Bank of England, the Payment Systems Regulator and firms on this. We will keep firms posted of any further information from the FCA.”
There is a lot of information and guidance from the FCA which can be found on their website, using the following link:
https://www.fca.org.uk/coronavirus
Further newsletters are to follow.
Action required: Awareness of potential survey request from the FCA (please review the content to ensure you would be able to complete, if asked).
A matter has been brought to our attention that will be of interest to all client firms;
• the FCA has issued a survey to a small number of general insurance intermediaries that is seeking information that may not be readily available.
In their request, the FCA states:
“…firms prudentially regulated by the FCA play an important role in supporting the functioning of the economy. During this time of stress, we expect firms to meet this responsibility by planning ahead to ensure the sound management of their financial resources. This includes taking appropriate steps to conserve capital and to plan ahead for how to meet potential demands on liquidity. We want to see firms continuing to operate in this challenging period. As part of our ongoing monitoring of the firms we regulate, we are writing to you to request information on some aspects of your financial resources.”
The survey has been sent to 300 general insurance intermediaries that have been selected “based on a review of the data we hold regarding the sector.”
In this instance, firms have been given just 1 week to respond to the survey.
The FCA has pointed out that it is not a mandatory requirement for a firm to respond to this survey. However, the FCA has also pointed out that a failure to respond “may influence our future interactions with your firm, in particular our assessment of your firm’s compliance with the Principles for Business. Principle 11 says that “a firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice”.”
We have attached to this newsletter a copy of the survey and a separate list of Frequently Asked Questions (FAQs) plus answers to show what information is being asked for. The survey is seeking financial information on income and expenditure, Risk Transfer arrangements and GWP, amongst other items.
The FCA is also suggesting that it should take “no more than five hours” to complete the survey!
We are unsure if this is just a one-off exercise but we feel it is better to be forewarned in case the FCA decides to widen its information-gathering and contact more firms accordingly.
As indicated previously, the FCA has stated:
“We are closely monitoring the coronavirus situation. We stand ready to take any steps necessary to ensure customers are protected and markets continue to function well. We are working closely with the Government, the Bank of England, the Payment Systems Regulator and firms on this. We will keep firms posted of any further information from the FCA.”
There is a lot of information and guidance from the FCA which can be found on their website, using the following link:
https://www.fca.org.uk/coronavirus
Further newsletters are to follow.
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