Challenge.
Our client, an EU-based (re)insurer, sought UK authorization to establish a branch for distributing legal expenses and assistance insurance via its UK MGA. The UK branch would also support reinsurance arrangements for third-party capacity providers. Following regulatory engagement with the PRA and FCA, the client required assurance that its UK branch was operationally ready and compliant with UK regulatory expectations.
The challenge was multifaceted, including:
- Ensuring governance structures were appropriately adapted for UK operations.
- Demonstrating readiness across all functional areas including compliance, risk, finance, claims, underwriting and technology.
- Providing the board and regulators with confidence in the branch's ability to operate effectively from day one.
Our Solution.
We were engaged to deliver a comprehensive operational readiness review. The scope included:
- Governance: Assessment of local and group-level oversight structures, including board policies and interaction mechanisms.
- Compliance: Evaluation of UK regulatory arrangements covering conduct, consumer risk, prudential requirements, operational resilience, outsourcing and reporting.
- Risk management: Integration of UK branch activities into the group risk management framework and local reporting.
- Internal audit: Inclusion of the UK branch in the audit universe and assurance reporting.
- Actuarial & finance: Review of capital, pricing, reserving, financial planning, treasury, tax and reporting processes.
- Underwriting & claims: Oversight of outsourced activities and client servicing.
- Technology & HR: Readiness of systems and regulatory compliance in employee lifecycle management.
- Reinsurance & operations: Integration into group arrangements and service management frameworks.
Our methodology.
- Agreement on objectives and timelines.
- Desktop review of documentation and branch setup plans.
- Interviews with heads of functions.
- Evidence gathering and validation of implemented internal controls.
- Drafting and finalization of a detailed readiness report.
The team was led by a seasoned governance and compliance expert with support from a compliance consultant with deep experience in regulatory frameworks and operational oversight.
Outcome.
We delivered a robust, evidence-based report detailing the UK branch's operational readiness. The report provided:
- Assurance to the client's main board that all functional areas were prepared.
- A clear view of embedded controls and procedures.
- Confidence to the client and its board that it was able to meet UK regulatory expectations.
The UK branch was successfully authorized and launched with governance and operational structures in place to support sustainable and compliant growth.
