22 October 2003
‘FINANCIAL GROUPS’ CONSULTATION DOCUMENT
The financial services industry has continued to see the formation of financial groups with significant activities in the banking and investments sectors on the one hand, and the insurance sector on the other hand. This has prompted regulators to consider the structures necessary for containing and supervising the risks arising in these groups (known as financial conglomerates). In the European Economic Area, this has resulted in the adoption of internationally agreed Principles in the Financial Conglomerates (or ‘Financial Groups’) Directive (Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council).
This Consultation Document also contains the FSA’s proposal to move to a ‘hard’ capital adequacy test at EEA parent level for UK insurance firms which was stated in the FSA’s CP50 – ‘Implementing the EC Directive on Insurance Groups’ (Chapter 4, footnote 10) – and is also noted in the ‘Interim Prudential Sourcebook for Insurers’, Guidance Note 10.1, para.22.
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PDF file of Financial Groups Part 1 (299KB)
PDF file of Financial Groups Part 1 Annex 1, 2, 3, 4, 5, 6 (596KB)
PDF file of Financial Groups Part 2, Annex 1 (115KB)