Reg Clarke Associate, Retail General Insurance Team 2. Feedback and Looking Ahead

2.1 What we are seeing Data review Peer review Board capability and governance Firm Enquiries Function: Trends Feedback and Looking Ahead

2.1 What we are seeing: Data review (annual returns) Key Performance Indicators: 2012 Total funds up 17% Gross Written Premiums up 15% Capital levels increased BUT at individual firm level experiences rather mixed Feedback and Looking Ahead

Capital data supports PRA supervisory approach -Better use of data to help identify outliers and trends -Enhances our supervision of firms (more proactive) Capital levels increasing steadily Fewer than 10% of firms have Pillar 1 ratios below 150% of their capital resource requirement 2.1 What we are seeing: Data review (quarterly returns) Feedback and Looking Ahead

Reporting quality generally good but Review of ECR (Enhanced Capital Requirement) forms reveal misreporting of individual capital guidance o Firms need to understand the ICG they have been set o Firms ICG cannot be lower than MCR Misreporting of base capital resource requirement by some firms o Impacted by Euro : Sterling exchange rate o Applies from 31 December 2.1 What we are seeing: Data review (annual returns) Feedback and Looking Ahead

2.1 What we are seeing: Data review (quarterly returns) Feedback and Looking Ahead

Annual periodic summary meeting for peer groups of firms Key objectives of review is to focus on identifying and feeding back trends and issues to the firms within that peer group Challenging exercise given niche markets of some firms PRA in early stages of review. Expect to cover our specified groupings over 18 month timeframe (by Q2 2015) 2.1 What we are seeing: Peer group review Feedback and Looking Ahead

First point of contact, liaising closely with key areas of the PRA and Bank. Dedicated team of five, wide range of regulatory experience. Webpage available to provide information on the issues you contact us about or are relevant to you, including reporting and authorisations. 2.1 What we are seeing: FEF feedback Feedback and Looking Ahead

Significant PRA resource spent in dealing with the issue of Board capability and governance. PRA expects firms to have regular Board review and assess: –Does the board have a good mix and balance of skills, experience, independence and knowledge to enable them to discharge their responsibilities effectively? –Is the Board satisfied that the business is run prudently? –Have clear structures of accountability and delegation been established? –Does the Board provide appropriate direction and challenge to the management team? NB: These expectations apply to all firms, regardless of size The things we would expect of a Board are referenced in the our Principles and in UK Corporate Governance Code 2.1 What we are seeing: Board capability and governance Feedback and Looking Ahead

Intend to seek forward looking quarterly capital data PRA assessing the potential for a programme of ICA reviews for Category 5 firms Electronic Reporting [Deadline for comments on OCP 8/13 is 1 November 2013] PRA intend to develop a proportionate NDF regime once SII position is clearer 2.2 Looking Ahead Feedback and Looking Ahead