in the 19th century, many were outraged by the introduction of the act which to them represented ‘ the mephitic influence of red - tape regulations ’ 16 – a sentiment that has surely been uttered in more recent times too. but ultimately, it was considered too costly for the state to rely on the effectiveness of market discipline at a time when the reputation of the industry was so sour it was being satirised in novels by dickens. indeed, for these reasons the 1870 act was widely welcomed by professional bodies like the institute and faculty of actuaries 17. the 1870 act introduced a number of elements aimed at regaining the confidence of policyholders in the insurance sector. first, insurers now had to stump up £20, 000 ( roughly £2m in today ’ s money ) as security before they reached a certain size, which curbed the influx of new companies that, up to this point, had been entering the market at very rapid rates. in addition, accounts and balance sheets had to be published in a prescribed form, thereby introducing a degree of consistency and comparability between different firms. importantly, firms now had to publish an actuarial report on their financial condition every five years and insurers had to take into account prospective liabilities under existing policies ; in other words, they had to look forward. the 1870 act was clearly a major evolution of the state ’ s approach to insurance and established many of the building blocks that still underpin the regulation of insurers today – the importance of solvency, the role of the actuary, the interests of current and future policyholders, and a role for financial disclosure. despite contemporary opinion at the time suggesting that a delicate balance needed to be struck between the role of the state and the activity of the market, the willingness of the state to legislate on these matters was a significant step in that it acknowledged more explicitly than before a legitimate public interest in insurance 18. despite this, many thought that the act was not robustly implemented, nor did it deliver results overnight. indeed, the 1870 act was relatively non - interventionist compared to how insurance regulation would evolve throughout the 20th century. but before we come to developments in the nearer term, it is worth noting that it wasn ’ t just the private sector that was mobilising itself in the insurance industry at this time. in 1865, parliament passed the government annuities act, which empowered the postmastergeneral to conduct life assurance business on behalf of the state.

real economy. conclusion the headwinds holding back the uk economy over recent years have been predominately real ones : an ongoing crisis in our main export markets of europe ; the necessity of fiscal consolidation at home ; the need for rebalancing of the uk economy towards net exports ; and balance sheet repair across all sectors. the weak relative performance of the financial services sector following the crisis has also been a direct drag on output as well as hampering the supply of credit. the central expectation in the february inflation report was for growth to resume in 2013, albeit at a relatively modest pace. patience will be needed. meanwhile, the monetary policy committee remains committed to supporting the economy whilst aiming to keep inflation low and stable in the medium term, in line with our remit. monetary policy can help, even if it can ’ t solve all the challenges of restoring sustainable real growth. bis central bankers ’ speeches