Lords inquiry backs LMG on need for a competitiveness duty

Lords Industry and Regulators Committee publishes its letter of recommendations, strongly endorsing the LMG’s call for reform...

The London Market Group welcomes the Lords Industry and Regulators Committee’s recommendations to the City Minister, after its inquiry into the regulation of the wholesale insurance industry. Having listened to market leaders and stakeholders, including those from the LMG, the Committee agrees that it is possible to have a properly functioning competitiveness duty without compromising safety and soundness.

As well as recommending real and effective accountability mechanisms for regulators with a competitiveness duty, the letter also called for a more proportionate and efficient implementation of the current rules. This represents an important acknowledgement of the LMG’s concerns regarding the ‘one size fits all’ approach by regulators, and the need for more openness and transparency, so that they are open to constructive challenge.

Caroline Wagstaff, CEO of the London Market Group, said: “This inquiry was an opportunity for the industry to show Parliament its value to the UK economy, but also the challenges it faces. We are delighted that the Committee agrees with us on the impacts that regulation can and does have on the future success of the market.

“In June last year, we launched our five-point plan to set out the regulatory and legislative changes we believe are necessary to enhance the market’s competitive position. It is excellent news for the London Market that so many of the recommendations in the Committee’s letter address the points that we raised. Central to any set of effective reforms will be the implementation of a fully functioning competitiveness duty, which this inquiry has shown is not only possible, but advantageous for the U.K.

“Growing global competition means that the London Market’s place as a jewel in the U.K. financial services sector is under threat, and it is vital to take action by producing a regulatory framework that makes us fit for the future. These recommendations are a step towards a regulatory system which boosts our competitiveness, brings in new investment and allows our market to fully contribute to the UK’s recovery and future prosperity.”