PRA drops ‘timely’ payouts in credit risk insurance

Plan for expeditious timeframe set aside to delight of banks worried about retaining capital breaks

The Prudential Regulation Authority (PRA) has dropped a proposal that credit risk insurance payouts occur in a ‘timely manner’ – in other words, days instead of the typical three months plus.

And banks couldn’t be happier.

“This validation by the PRA is a very positive result for credit risk insurance, there’s absolutely no doubt about that,” says Marcus Miller, global lenders solutions group leader for credit specialities at Marsh, a risk consultancy.

At present, most insurance policies take