Treasury Minister Eddie Teare MHK has announced today that the Insurance and Pensions Authority and the Financial Supervision Commission are working towards a merger in 2015. The merger, which is supported by the Council of Ministers, is strategically important for the Isle of Man.
Integrated financial regulators are the norm around the world, and this move will remove uncertainty about the Island’s regulatory structure which, in one form or another, has existed since the two organisations separated in 1984. The Island’s regulatory framework can now be developed with complete focus on future regulatory challenges and the evolving needs of the economy.
The two organisations are already located in the same office building, and the merger is expected to lead to a number of benefits, including:
- eliminating any areas of regulatory overlap, gaps or arbitrage and enhancing the coordinated supervision of the licence-holders of both organisations which are members of a group or which hold a dual licence;
- bringing together and therefore augmenting experience and expertise in many areas;
- creating a ‘critical mass’ in the combined organisation which then gives scope for considering whether new functions can be incorporated;
- more concentrated strategic and operational work in the area of anti-money laundering and countering the financing of terrorism;
- office management and administrative functions, human resources and IT systems;
- opportunities for staff professional development and career progression;
- enhanced coordination of relations and work with other areas of Government, with regulators in other jurisdictions and with global organisations such as the International Monetary Fund and the Financial Action Task Force;
- enhanced capability for, and coordination of, contingency, disaster and emergency planning, including in relation to customer compensation schemes; and
- cost efficiencies arising from the consolidation of the two bodies.
In addition, a unified structure will usher in a debate with Government about renewing the Isle of Man’s policies on:
- the independence and accountability of the regulator; and
- the roles responsibilities of both regulator and Government.
Minister Teare said,
'I have asked both organisations to prepare a plan for achieving the merger, which will take account of the interests of all key stakeholders, and which will have a provisional completion date of 31 March 2015. With the support of the Boards and staff of the IPA and the FSC, and of our business community, we will build a new regulator which can be proud of the heritage of its predecessors whilst being ready to address the future needs of our economy and maintain our excellent international reputation.'