before a claim either arises or is fully settled. even if they do have the right information, it would be unreasonable to expect individuals to be able to exert a strong disciplining effect on insurers. even the best - informed retail policyholder would not be able to make sure that an insurer holds adequate reserves to pay claims, that it does not grow excessively by taking on too much risk, or that it does not under - price in an unsustainable manner to attract new business. we have seen the significant human cost that can be associated with insurance failures. a prominent example is the fate of over a million policyholders when equitable life came to the brink of collapse in 2000. equitable was forced to close to new business, after it found it could no longer honour its promises on offering guaranteed annuity rates on its products. many of its customers, aged 75 and over, had invested their life savings into these products but were left with significantly reduced retirement income. ten years later, the government agreed to pay compensation amounting to £1. 5 billion. but many policyholders and their families suffered over the decade when their fate remained uncertain, and some of those affected were no longer alive to benefit personally from the compensation. another way to think about this is to consider the importance, at a human level, of what insurance companies do – and therefore, how we would feel about it if an insurer couldn ’ t make good on its promises. much of this is about the everyday business of work, family and home, and i have spent some time this year with policyholders to remind myself of this. the most striking thing about talking to a group of policyholders is simply the vast range of insurance needs people have, from burst pipes to with - profits funds. one is also based on abi data, as at end 2016. all speeches are available online at www. bankofengland. co. uk / speeches struck by how complex people find insurance, and some of the different experiences that can arise. one person i spoke to had a really excellent experience with a uk home insurer. another ’ s family had been injured in a motorway pile - up, and was having terrible difficulty trying to find out if the non - uk insurer of the driver who had hit them is or is not solvent. i also spoke to a group of small business owners, and was struck by how reliant many of them are on insurance for running their businesses.

suitable near risk - free reference rate for sterling markets, and formulating a transition plan to catalyse a change in market practice so that a significant portion of derivatives contracts reference the new rfr rather than libor. i believe that this is a critical component of the interest rate benchmark reform agenda. structure of the group the working group we have initiated today is a private - sector group comprised of senior subject matter experts from major sterling swap dealers. participation is at the invitation of the bank of england, and we have convened this particular group because our experience of derivatives reform suggests that the swap dealer community can be most influential in catalysing a transition. bis central bankers ’ speeches it will of course be necessary to reach out to a wide range of stakeholders – but the commitment to change must originate from this group, and this group is best placed to promote adoption amongst the swap user community. in particular, we expect that you will reach out to ccps, exchanges, benchmark administrators, and end users – including institutional investors and corporate treasures. the bank is prepared to facilitate this outreach process by hosting roundtable meetings at the request of the working group. the international swaps and derivatives association will participate in a non - voting capacity and provide guidance on contract robustness and reference rate transition. representatives from the bank of england and the fca will participate as ex - officio members. the bank will also provide a secretariat, host meetings, and publish the terms of reference of the group, meeting agendas and minutes on our website. 1 aims of the group and timeline the rest is up to you. the first task for the group is to identify the most appropriate near riskfree reference rate for sterling markets. alongside that you will consider how contracts referencing the rate can be made robust to changes in market structure. we expect these discussions to reach a conclusion during the third quarter of this year. the group will then develop an adoption and transition plan over the remainder of 2015, considering the factors that could facilitate adoption of the chosen rfr, as well as metrics of success and a timeline for the transition process. it is anticipated that firms participating in the working group will sign letters of agreement to support adoption of the chosen rfr, referencing these metrics. implementation is expected to begin in 2016. we believe that this needs to be a market - driven process and that the choice of rfr is yours to make. however, this is not an academic exercise. a “ choice ” means that you will