What is the primary objective of the PRA?

The primary objective of the Prudential Regulation Authority (PRA) is to promote the safety and soundness of firms that it regulates, which includes banks, insurers, and investment firms. This focus is crucial because a stable financial sector is essential for the wider economy. By ensuring that these regulated entities maintain adequate capital and liquidity, manage risks effectively, and adhere to regulatory standards, the PRA aims to protect policyholders and maintain confidence in the financial system.

This objective supports a robust regulatory framework that ultimately safeguards not just the individual policyholder’s interests but also the overall stability of the financial markets. The emphasis on safety and soundness is reflective of the PRA's commitment to prevent failures that could have widespread repercussions, thus contributing to a resilient economy and protecting consumers' interests in the insurance sector.