Lesson Summary

The Bank of England and Financial Services Act 2016 strengthened the governance and operational capabilities of banks in the UK. The act also established three main regulatory bodies overseeing the financial industry:

• The Prudential Regulation Authority (PRA), which supervises large organizations to manage potential failures and their impact on the economy.
• The Financial Conduct Authority (FCA), responsible for regulating business conduct, taking preemptive action, and conducting market-wide analysis to prevent consumer harm. The FCA has the authority to ban products deemed detrimental to consumers.
• The Financial Policy Committee (FPC) within the Bank of England, which identifies emerging risks, sets strategic directions, and collaborates with other regulators.

The FCA operates with three key objectives:

• Securing consumer protection
• Upholding the integrity of the UK financial system
• Promoting fair competition in the consumer's interest

Definitions related to insurance within the rules are:

• A policy holder is anyone entitled to make a claim directly to the insurance company upon an insured event.
• A customer is a policy holder or a prospective customer making arrangements before a contract is finalized.
• A consumer is a natural person acting outside their trade, while a commercial customer is someone not considered a consumer.