First, underwriting: we expect Boards to be relentlessly inquisitive in understanding and challenging the effectiveness of underwriting controls, pricing trends, exposure changes and rate adequacy in order to make informed decisions, and provide meaningful challenge, to the business. Fundamentally, the Board should seek evidence that underwriters are maintaining appropriate discipline. Second, reserving: a robust approach to the setting of reserves and appropriate and adequate oversight of the reserving process is vital. We expect Boards to demonstrate independent challenge of key issues, material uncertainties and significant assumptions in the reserves and the rationale for their choice of booked reserves. Third, reinsurance: we expect Boards to ensure that the economic impact of the reinsurance transaction is appropriately reflected in business plans, capital setting and reserving; and to be alive to the wider risks to which reinsurance placements can give rise. This includes  2  BIS central bankers’ speeches  ensuring the total risk and uncertainty over the claims run off has been captured in your risk management system and considered within your ORSA. Fourth, capital: we expect Boards to ensure that firms assessment of risk and capital requirements remain valid in this challenging trading environment. The new System of Governance requirements under Solvency II and the Senior Insurance Managers Regime are timely additions to the insurance regulatory regime, ensuring that clear expectations are being set as to the strength of systems and controls, and that there is clarity as to the roles and responsibilities of senior managers in firms.

I am referring to Dutchess and Orange counties, which comprise the Poughkeepsie-Newburgh-Middletown metropolitan area, and Ulster County – which is also the Kingston metropolitan area. First, what does the mid-Hudson Valley region look like from an economic standpoint? There is a lot of economic activity here. All told, about 850,000 people live here and 420,000 jobs are located here. And, over the past decade, all three counties added people more rapidly than the state. People here are, on average, more highly educated than in the nation as a whole, as measured by the over 30 percent of residents who have college degrees. So, it is not surprising that median household income in all three counties is above the national median. The industrial composition varies by county.   Ulster County employs a relatively large share of people in its hotels and resorts, reflecting the importance of tourism. And, SUNY New Paltz is a major employer in the county.   Dutchess County’s jobs are heavily weighted toward high-tech manufacturing, with growing diversification.   In Orange County, transportation accounts for a relatively large share of employment, partly due to Stewart Airport. West Point Military Academy is a major employer, and many Orange County residents commute to New York City, Westchester or Rockland for work. Now, how has the area fared during the recent recession and recovery? I will address this from three perspectives: housing, credit conditions and jobs. Unlike central and western New York, this region experienced a modest boom and bust housing cycle.