Which body is responsible for monitoring the solvency of insurance companies?

The Prudential Regulation Authority (PRA) is responsible for monitoring the solvency of insurance companies. Its primary role is to ensure that financial institutions, including insurers, maintain adequate capital reserves to protect policyholders and the financial system. Solvency refers to an insurance company’s ability to meet its long-term financial obligations, which is crucial for maintaining trust in the insurance industry and ensuring that claims can be paid.

The PRA utilizes various regulatory frameworks and guidelines to assess and enforce solvency standards, evaluating factors such as assets, liabilities, and risk management practices of the insurers. This oversight helps prevent situations where an insurance company might become insolvent, thereby safeguarding policyholders’ interests and contributing to the stability of the financial market as a whole.

The other options pertain to different functions or sectors. The Department of Trade and Industry primarily handles broader trade and industrial policies rather than specific financial regulation. The Insurance Ombudsman's Bureau facilitates the resolution of complaints between consumers and insurance providers but does not involve itself in financial solvency or regulation. Lastly, The Treasury manages the overall economic strategy, taxation, and public finance, and does not directly regulate the solvency of individual insurance firms.