Research Handbooks in Financial Law series
Edited by Julian Burling and Kevin Lazarus
Chapter 11: History: A History of Insurance Regulation in the UK
Robin Ford 1. OVERVIEW Although an Ofﬁce of Assurances was established in the 1500s during the reign of Queen Elizabeth I, the regulation of insurance business in the UK really only began in earnest with the Life Assurance Companies Act 1870. The 1870 Act initiated the ﬁrst of four phases in the development of UK insurance regulation which I outline in this chapter. That legislation (and much of the legislation that was to follow) was largely enacted in response to insurance ﬁrm collapses and scandals. It reﬂected a governmental approach that was merely reactive and designed to limit any regulatory interference in the market to the minimum necessary. This approach held sway until the UK joined the European Economic Community (EEC) in 1973.1 The Government then willingly accepted some enhanced regulation to the extent necessary to make the EEC’s market liberalising measures effective. The third phase of regulation in the UK began in the mid-1980s with the Financial Services Act 1986 (applicable to most life insurance ﬁrms and life intermediaries). This Act initiated a more prescriptive approach to regulation which saw the UK go well beyond mere compliance with EEC requirements, yet the approach remained largely rules based, with minimal oversight of ﬁrms’ affairs by regulatory supervisors. By 2000, in the fourth phase, the Government and the regulators had developed a more sophisticated regulatory approach that was more outcomes focused, risk based, and interventionist. These developments are set out in more detail below. However, this review of the...
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