The protection of insurance policyholders will be a priority for the new Prudential Regulation Authority (PRA), it has been announced.
The PRA will take over the supervision of financial institutions from the Financial Services Authority (FSA) by the end of 2012.

The Bank of England and the FSA say under the new regime, insurers will still be allowed to fail if insolvent. But the PRA will aim be to minimise the impact on the financial system.

"The PRA's role will be to ensure there is a reasonably high probability that an insurer is able to meet claims from, and material obligations to, policyholders as they fall due," the Bank and the FSA said.

"And to make sure that where an insurer is unable to meet such claims and obligations, the adverse consequences for policyholders are minimised by ensuring that the insurer fails in an.....Click LINK Below to read more