§ Gillian MerronTo ask the President of the Board of Trade what plans she has to change the regulations made under the Insurance Companies Act 1982 regarding financial reporting by insurance companies. [20242]
§ Mrs. BeckettRegulations have been laid before Parliament which make certain amendments to the Insurance Companies (Accounts and Statements) Regulations 1996 in the light of experience of the first year of implementation. These amendments are set out below.
The information which life insurance companies are required to submit in respect of the long term business in their annual returns has been extended to provide the regulator with the additional detail necessary to be satisfied that "with profits" life insurance policies are meeting the reasonable expectations of policyholders.
Two areas of disclosure have been removed from the scope of audit. Firstly, it was the intention under the previous Regulations that the inclusion of directors' certification on compliance with the money laundering guidelines within the scope of audit be optional, in recognition that in the normal course of business auditors are unlikely to be in a position to give an opinion on the reasonableness of this statement. The amendment clarifies this position. Secondly, it is important that the regulatory framework provide for independent audit assurance that directors' statements that their companies' practices are consistent with representations to policyholders have been reasonably made.
The formulation in the existing regulations for obtaining this independent assurance has not provided satisfactory in practice and has been removed pending further consultation with the audit profession on how to introduce a more effective provision for future years. The statutory requirements relating to certificates by directors remain unaffected by these changes to the scope of audit.
527WSome of the wording and forms in the Insurance Companies (Accounts and Statements) Regulations 1996 have been clarified without materially changing their meaning.