capital setting and reserving ; and to be alive to the wider risks to which reinsurance placements can give rise. this includes 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. possible market - turning events previous soft phases of the insurance cycle have ended, sometime quite dramatically, with a major loss. examples include hurricane andrew in the early 90s, asbestos, pollution and health losses in the mid - 90s and “ 9 / 11 ” in 2001. whilst it is understandable that some in the industry talk of the need to have naive capital and capacity cleared out of the market, restricting supply and supporting premium above the technical price level, there is a sense that, this time, things may be different. many believe that further capital is “ waiting in the wings ” to invest in the sector in the event that prices rise. nonetheless, it is sensible to plan on the basis that a significant, market - turning event might occur at some point. taking this as the starting point, we think there is an opportunity for firms to think through what issues might then arise and to consider what steps can be taken now to plan for these events, not least because we know some firms will be very keen to respond to any improvements in market conditions which might arise after a large loss event. we are publishing today a consultation paper setting out our expectations of firms in planning for these types of extreme insurance loss events ; focussing on some of the governance, risk management, capital management and reporting capabilities that we think firms need to consider. the guidance also sets out an indicative template containing the type of information we think we will request from firms following a loss, and also expectations of firms with approved internal models. we note that this is an area where the industry itself is keen to ensure that it is well prepared and we welcome working with it on this topic. none of us will have a crystal ball to plan perfectly for such an event, and as decision makers we will only be able to make final judgements

limitations. so we plan to use a range of measures alongside other supervisory review process initiatives, such as the analysis of internal model outputs. conclusion in conclusion, given today ’ s audience, i want to stress the critical professional role of actuaries in current soft market conditions, where there may be a greater tension between on the one hand underwriting discipline and appropriate reserving and on the other hand business growth and current - year profits. actuaries are responsible for providing assurance on reserves and opinions on both the underwriting and reinsurance strategies of firms, implying strong engagement with the risk function, as well as independence and objectivity in their assessments. events like today ’ s, where actuaries come together to share knowledge, with the aim of raising professional standards, are particularly important and welcome. chart 1 bis central bankers ’ speeches chart 2 bis central bankers ’ speeches