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Penrose Inquiry. Read indexed debates, questions, statements and early day motions, with links to the original parliamentary records.

20 indexed mentions for this inquiry Earliest recorded mention: 21 March 2002
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Parliamentary mentions

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Equitable Life Assurance Society

Written Question House of Lords
Baroness Bowles of Berkhamsted · Liberal Democrat Answering body: Department for Business, Energy and Industrial Strategy
Parliamentary excerpt

To ask Her Majesty's Government, further to the Written Answer by Lord Callanan  on 22 November (HL3771), what assessment they have made of the critiques by the Penrose Inquiry into Equitable Life summarised in points (a) – (e) of Appendix IV paragraph 1.6 of FRS 27 of December 2004; and for each point, how they have addressed it with the IFRS Foundation; and if any points have not been addressed, why not.

Government answer

Answering body: Department for Business, Energy and Industrial Strategy

FRS 27 has addressed many of the critiques made by the Penrose Inquiry in the development of IFRS 17, except for the differences between the accounting bases for regulatory and financial reporting. Insurance is inherently a complex business so some complexity in the related financial reporting is inevitable. However, a standardised basis for financial reporting will go a long way to addressing concerns related to complexity.

The Penrose Inquiry also identified regulatory failures to restrain the hazardous conduct of firms and to protect stakeholders. The Financial Services Authority (now the Financial Conduct Authority) took the recommendations from the report to enhance the solvency and liquidity requirements and set other boundaries more tightly in the Solvency II legislation.

The accounting basis for regulatory purposes is not within the remit of the IFRS Foundation and regulatory reporting is not designed to report performance. The Prudential Regulatory Authority has responsibility for promoting the safety and soundness of insurers and the protection of policy holders.

Original parliamentary record

Equitable Life Assurance Society

Written Question House of Lords
Baroness Bowles of Berkhamsted · Liberal Democrat Answering body: Department for Business, Energy and Industrial Strategy
Parliamentary excerpt

To ask Her Majesty's Government which of the deficiencies in insurance company accounting that were identified by the Penrose Inquiry into Equitable Life have been dealt with by the International Financial Reporting Standards Foundation; how they were dealt with; and if they were not dealt with, why not.

Government answer

Answering body: Department for Business, Energy and Industrial Strategy

The Penrose Inquiry into Equitable Life focussed on UK financial and regulatory reporting in the years leading up to 2001, and how they related to the Equitable Life Assurance Society.

The Inquiry identified that life insurance company accounts needed a consistent and realistic accounting basis for the preparation of accounts. They recommended the creation of consistent standards for the preparation and presentation of accounts for long term business. The IFRS Foundation has stated that this was a key aim when developing and publishing IFRS17. In order to make insurers’ financial statements more useful for users of financial statements.

Original parliamentary record