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Regulator looks at risk management

The FSA is understood to have concerns about product providers&#39 approaches to risk assessment.

It is known to have concerns that many providers are too reactive to risk and should be implementing more proactive approaches to risk assessment such as risk modelling.

Financial services consultants the Silent Partner believes providers need to focus on creating a better audit trail. Director Tom Williams says the curbing of risk is the highest priority for the industry and that providers need to better understand the different aspects of risk.

Aegon head of public affairs Scott White believes that the leading providers have adequate controls and structures in place to manage risk across all parts of the business.

FSA head of regulatory themes Chris Ham says: “We have been looking at the ways in which insurance companies have been addressing the need for improvements in risk management following up our comments in the Tiner report of October 2002. We are likely to have more to say about our findings later this year.”

White says: “In a changing and evolving market, there will always be different factors that may represent different risks. Broadly speaking, I think the main providers have adequate controls to deal with these changes.”

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