PRA warns insurers over work culture
The Prudential Regulation Authority (PRA) has told general insurance firms they must provide a supportive environment where staff feel comfortable raising concerns, reports Jane Connolly.
In a letter to chief executives, acting director of insurance supervision Gareth Truran outlined several areas that the PRA will focus on over the coming months. These include ensuring that firms offer mechanisms for employees to raise issues such as sexual harassment and bullying.
Staff must feel able to speak up about their concerns.
“It is clear that some firms have more work to do to improve aspects of corporate culture and individual behaviour,” he says.
Although encouraged by recent initiatives, he adds: “We will also continue to work closely with the Financial Conduct Authority to assess instances where inappropriate culture and behaviour within firms may impact compliance with regulatory expectations, standards and our statutory objectives.”
The letter also stresses that staff must be able to raise concerns about poor practices or unidentified risks.
“We remind boards that they have a collective responsibility for articulating and maintaining a culture of risk awareness and prudent management of risk for their organisation,” Truran says. “These questions may be more acute at a time of challenging market conditions, where commercial pressures may be high.”
He adds: “Senior management should be careful to ensure that commercial pressure to deliver results does not translate into inappropriate pressure on individuals within control functions to weaken assumptions. Boards should be alert to this risk and ensure that the effectiveness of the risk control framework is supported by the organisation’s culture.”
The letter states that as well as formal channels such as whistleblowing, there should be other mechanisms in place such as opportunities for heads of control functions to meet non-executives outside formal board meetings.
