Our ongoing focus on international standard setting and policymaking, including in relation to climate change  The final aspect of competitiveness I would like to discuss today is the future role of the PRA and  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  UK in shaping policy and engaging with other regulators at an international level. Even prior to withdrawal from the EU this was an area in which the PRA invested considerable time and effort, and post-departure this assumes even greater importance – now more than ever, it is important that the UK view and experiences are captured as part of international standard setting process. We are well positioned here given that Vicky Saporta, our Executive Director of Prudential Policy, also serves as Chair of the International Association of Insurance Supervisors (IAIS). Why is this important to UK competitiveness? International standards aim to create a common language for the supervision of internationally active insurance groups; to level the playing field internationally for insurers; and to simplify regulation for large international groups. To this end, the implementation of common international standards should serve to reduce barriers to cross border insurance activity globally, allowing for new international activity and removing friction where this is already taking place. Ensuring that the UK views are reflected properly in any international standards that are created reduces the risk that UK insurers are faced by regulatory regimes that are not wholly compatible with their business models and lines of business.
We are also taking steps to rationalise the requirements that branches are subject to, including consideration of the removal of branch capital requirements as part of the Solvency II review, with the aim of limiting regulatory requirements to those required to deliver our objectives. We are, however, also conscious of the need to ensure a level playing field among all insurers operating in the UK – there can be no question of insurance branches being held to lower standards than insurers that are based here, which would distort competition and potentially increase the risks to PRA objectives. All insurers will be supervised proportionately based on their possible impact on safety and soundness and policyholder protection. We will assess our ability to rely on home state supervisory authorities, considering both their supervisory equivalence and level of co-operation with us, on an ongoing basis, and will take action as needed if we judge that we are unable to supervise a branch effectively. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  We have also been clear that some overseas insurers have UK liabilities that that represent too great a risk to PRA objectives, including the impact of branch failure on policyholders and Financial Services Compensation Scheme (FSCS) levy payers, to rely on branch supervision with its inherent limitations, even with strong co-operation from home state regulators.