which the treasury select committee takes a strong interest. our competition work spans banking and insurance, but there has been much more public debate about the former. we have, however, been pursuing our objective assiduously on the insurance side – to pick out some examples of steps we have taken to facilitate competition : we have created a very proportionate regime for the 40 % of firms we regulate who are not covered by solvency ii ; we have given around 85 % of solvency ii firms in the uk the opportunity to avoid around 70 % of the quarterly reporting burden they would otherwise face ; we are working with hmt, hmrc and the london market to introduce a new structure for insurance - linked securities ; and http : / / www. bankofengland. co. uk / about / documents / ieo / evaluation0316. pdf all speeches are available online at www. bankofengland. co. uk / speeches we have authorised 19 new insurance companies and lloyd ’ s managing agents in the first three years of the pra ’ s existence. conclusion financial regulation and supervision can sometimes be a dry business. and in insurance in particular, some of the more arcane aspects of the regulatory framework can rapidly turn off everyone except us and the industry. i have therefore spent some time looking into individual policyholder cases, to remind myself about what is going on at the frontline. one in particular made a powerful impression on me. a young man got in touch with an insurance company to claim on his critical illness cover. the reason for the claim was that his 4 - year old son had brain cancer. the cancer was in a difficult place, and the best - case outcome from a forthcoming operation was grim. the worst - case was the grimmest of all. the father was calling to claim on the policy in order to help cover the ancillary costs to the family while the nhs took forward this procedure. the company did the right thing, and it had enough money to do the right thing. i and others were only exposed to this case in a wholly anonymised way, for data protection reasons. despite this i have never been in a meeting where so many people wept. this is what policyholder protection is really about. it ’ s not about the risk margin, the view to ultimate, the matching adjustment or corporate bond spreads. it ’ s about making sure that insurance companies are there to help when disaster strikes. that ’ s why we take this part

exactly makes these machines merit the label of “ artificial intelligence ”? information systems with ai exploit complex patterns recognized in vast unstructured data sets to mimic human creativity, problem solving, and critical thinking. some forms of ai — prediction of customer tastes with machine learning, for example — are already employed in the business sector. others are still emerging, especially generative ai — programs that create new text and images in response to prompts. applications in software creation, customer service, and marketing are already with us. but the full scope of generative ai ’ s application will be revealed slowly as firms experiment and innovate. this subject bears careful research and understanding in my role as a monetary policymaker. the federal reserve ’ s dual mandate is to promote maximum employment and stable prices. as i discussed in a recent speech at the ohio state university, the spread of ai and other technologies could have an effect on both. 3 see lisa d. cook ( 2023 ), “ generative ai, productivity, the labor market, and choice behavior, ” speech delivered at the national bureau of economic research economics of artificial intelligence conference, fall 2023, toronto, september 22, https : / / www. federalreserve. gov / newsevents / speech / cook20230922a. htm. see lisa d. cook ( 2024 ), “ what will artificial intelligence mean for america ’ s workers? ” speech delivered at the ohio state university, columbus, ohio, september 26, https : / / www. federalreserve. gov / newsevents / speech / cook20240926a. htm. - 3artificial intelligence adoption on the rise let me say from the outset that there is tremendous uncertainty about ai ’ s implications. we still do not know what the magnitude or intensity of these effects will be, which workers and firms will be most affected, how big the increase in productivity might be, or even the period over which these effects will be realized. while much is still to be learned, i see growing evidence that ai is poised to have a substantial effect on u. s. and global labor markets. as firms deploy these technologies and workers discover ways to make use of them, such developments can create the conditions for greater productivity and thus higher wage growth consistent with stable prices. and adjustments in the labor market that follow as the economy adapts to technical change can affect maximum employment. my view is that ai, and genera