FSA reserve requirements for general insurers

The FSA may force general insurance providers to hold more cash in reserve to protect consumers from firms unable to pay out to policyholders. Earlier this month, the regulator flagged the introduction of a risk-based enhanced capital requirement (ECR) for non-life insurers, made up of capital charges on asset and insurance risks. The FSA said the ECR, detailed in Consultation Paper 190 released on 15 July, would typically increase the minimum regulatory capital firms must hold under the European Directives on capital adequacy. The new rules would be phased in so initially this would...