PRA published the consultation paper CP8/18 related to the external audit of the public disclosure requirement under Solvency II. CP8/18 sets out the PRA proposal to amend the rule that requires the external audit of parts of the Solvency and Financial Condition Report (SFCR). PRA proposes that any amendments would be effective for financial years ending on, or after, November 15, 2018. Comments are requested by July 11, 2018.
SFCR is the key public disclosure under Solvency II and is intended to enhance transparency and comparability, through the disclosure of essential information on the solvency and financial condition of a firm. PRA estimates that the proposed amendments would remove the SFCR external audit requirement from the end of 2018, for more than 150 smaller UK Solvency II firms (including mutuals) and groups. PRA considers that this change would improve the proportionality of the requirement. PRA developed the proposals in CP8/18 as part of its work on reviewing aspects of the insurance prudential framework, in light of its experience following the implementation of Solvency II in the UK.
PRA first consulted on the requirement for elements of SFCR to be subject to external audit in CP43/15 and CP23/16. Then, it made the rule with effect for financial years ending on or after November 15, 2016. Following the implementation of the rule and the first year of public disclosure, PRA collected quantitative data from UK Solvency II firms on audit costs incurred and met with stakeholders such as audit firms, investors, insurers, and insurance trade bodies. In light of the findings, PRA made the proposals in CP8/18. CP8/18 is relevant for all UK Solvency II firms (including mutuals), auditors, and users of SFCRs.
- Press Release
- CP8/18 (PDF)
- CP43/15 and CP23/16
- Series of Improvements to Implementation of Solvency II
Comment Due Date: July 11, 2018
Keywords: Europe, UK, Insurance, Solvency II, SFCR, External Audit, Public Disclosure Requirement, CP8/18, PRA
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA published the annual report on asset encumbrance of banks in EU.
FCA proposed two sets of guidance on the approaches to mortgage repossessions and consumer credit repossessions, with comment period ending on January 18, 2021.