One in five UK insurers would fail FSA proposal

By Jon Guy

A FIFTH of UK insurers would fail to meet the Financial Services Authority’s (FSA) proposed enhanced capital requirements (ECRs) if they were to be implemented now, according to research from a leading consultancy. Tillinghast, part of the Towers Perrin group, said its study into the solvency and capital standing of UK insurers found almost a fifth of general insurance companies would currently fail to meet their ECRs, the new proposal from the FSA for determining how much capital insurers need to have. It warned that to address the current issue, companies will either need to raise capital or reduce their ECRs by, for example, turning business away and reducing premium income.