Radical action plan to cut red tape and kickstart growth

Was the official Government headline used as the Chancellor met top regulator bosses in Downing Street.  On Monday 17 March she unveiled an action plan to deliver on the pledge to cut the administrative cost of regulation on businesses by a quarter, to “make Britain the best place to do business and drive economic growth”.

Corporations seemingly cannot exist without reporting on the minutiae of their operations and insurance firms are no different. So, I wanted to dedicate this column to this seemingly boring but incredibly demanding requirement of reporting to the regulator. A subject that takes the C-suite away from their clients and has them caught up in back-office red tape.

How much value do all these reports actually have?  This is something we have discussed on behalf of our members in our regular liaison with the FCA. Our members, whether large or small, with simple or complex operations, are faced with similar demands for data from the regulator, sometimes contemporaneously and often in rapid succession.  One SME member told us that they had received 47 requests for information in one year.

We recently fed back such concerns to the FCA, as streamlining report requirements is a BIBA Manifesto issue.  We are suggesting some feasible ways to ease the burden on brokers.  We presented 11 ways that information seeking could be slicker and ultimately help drive greater productivity and contribute to their Secondary Growth and Competitiveness Objective.

1. Consolidating all reporting as far as possible into the two RMAR annual requests.
2. For the FCA to have a central reporting function (rather than just an oversight committee) which manages the burden of requests on a sector, so that different regulatory departments do not issue their requests at the same time, for example.
3. Consolidating the Financial Resilience report into the two annual RMAR requests.
4. Reverting the recent unwieldy consumer credit reporting requirements to the previous system so reducing 117 lines of data back to the key line.
5. Working constructively with the CMA to remove NCD protection reporting requirements from intermediaries - which currently duplicate data submitted by insurers.
6. Capping any additional reporting requests to no more than two a year in excess of the RMAR.
7. Using consistent dates that match with month-end or financial year-end.
8. Concluding and implementing work with the Bank of England on common standards.
9. Removing the requirement for insurance intermediaries to attest to product value assessments; the product manufacturer should be solely responsible for this.
10. Easing the Fair Value Assessment requirements on insurance intermediaries to once every three years.
11. Streamline the online system to make it more intuitive, ensuring consistent data input requirements across all forms, thereby avoiding duplication and speeding up validation.

Making these calls a reality would drive efficiencies across the insurance broking sector and would undoubtedly increase the level of good customer outcomes – something demanded by the Consumer Duty.

Brokers understand the need and benefits of the FCA becoming a data-led regulator, and are supportive of its use of technology to make the regulatory reporting process more effective and efficient. However, the data collected must be useful—and used in a timely manner (otherwise, some might say, “What’s the point?”). It’s right that a regulator should be forward looking and use innovations to drive improvements.  The fact that the regulator has recently implemented ‘single sign-in’ makes a massive and positive difference for firms trying to use the website.

Over the last year at BIBA, we have had some extremely positive discussions with the FCA, and I am pleased to see that their new five-year strategy covers reporting, and it looks like they are intending to make a positive difference by already retiring a number of reports.

I recently met a leading figure at IAIS (the International Association of Insurance Supervisors), whose members can recommend principles and standards and provide supervisory guidance, as well as being a forum for members to share their experiences and understanding of insurance supervision and insurance markets.

I believe there is also a role for the IAIS to ensure that the reporting requirements on the 200 regulators they represent are proportionate, rather than leaving this to the discretion of the member states.

Finally, the subject of reporting came up in a meeting I had with the City minister, Emma Reynolds, recently. I genuinely believe that now is the time to overhaul reporting requirements, without delay, all of course helping to implement the ‘Radical action plan to cut red tape and kickstart growth’.