General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
December 12, 2017

PRA launched a consultation paper (CP27/17) that proposes updated expectations of firms in respect of the model change process set out in the Supervisory Statement SS12/16 titled “Solvency II: Changes to internal models used by UK insurance firms” and internal model change policies set out in SS17/16 titled “Solvency II: internal models – assessment, model change and the role of non-executive directors.” CP27/17 also proposes a process for quarterly model change reporting. The consultation closes on March 20, 2018. PRA also published a statement setting out its review of the time taken to assess model change applications approved since the implementation of Solvency II on January 01, 2016; how firms had completed the Common Application Package (CAP) when making model change applications; and how firms have defined model changes in model change policies.

PRA has developed the proposals in CP27/17 as part of its work on adjustments to the insurance prudential framework, in the light of experience following the introduction of Solvency II in the United Kingdom. This includes a series of improvements that support PRA’s commitment to the Treasury Select Committee. The proposals aim to reduce the burden on firms and to make better use of supervisory resources in pursuit of PRA objectives. CP27/17 is relevant to all UK Solvency II firms, the Society of Lloyd’s, and its managing agents. It is most relevant to firms that have an internal model approval. It may also be of interest to UK Solvency II firms seeking approval to use an internal model and to UK Solvency II firms that are part of the European Economic Area (EEA) or non-EEA groups with a group internal model. 

PRA proposes that the updated guidance on the model change process and model change policies would be implemented in the second quarter of 2018. PRA considers that the proposed change to the model change process would result in the need for firms to modify their model change policies. Changes to the model change policy are subject to supervisory approval, following the procedure set out in paragraph 2.14 of SS12/16. PRA proposes that the changes in relation to minor model change reporting would take effect from June 2018.


Related Links


Comment Due Date: March 20, 2018

Keywords: Europe, UK, Insurance, Solvency II, Internal Models, CP27/17, PRA

Related Insights

OFR Adopts Data Collection Rule on Centrally Cleared Repo Transactions

OFR adopted a final rule to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market.

February 20, 2019 WebPage Regulatory News

FHFA Finalizes Rule on Federal Home Loan Bank Capital Requirements

FHFA published, in Federal Register, the final rule to adopt, as its own, portions of the regulations of the Federal Housing Finance Board pertaining to the capital requirements for the Federal Home Loan Banks.

February 20, 2019 WebPage Regulatory News

SRB Publishes Framework for Performing Valuations in Resolution

The framework provides independent valuers and the general public with an indication of the expectations of SRB on the principles and methodologies for valuation reports, as set out in the legal framework.

February 19, 2019 WebPage Regulatory News

US Agencies Extend Consultation Period for the Proposed SA-CCR

US Agencies (FDIC, FED, and OCC) extended the comment period for a proposed rule to update their standards for how firms measure counterparty credit risk posed by derivative contracts.

February 18, 2019 WebPage Regulatory News

FED Extends Consultation Period for Stress Testing Rule

FED has published in the Federal Register a notice proposing amendments to the company run and supervisory stress test rules.

February 15, 2019 WebPage Regulatory News

EBA Single Rulebook Q&A: Third Update for February 2019

EBA published answers to two questions under the Single Rulebook question and answer (Q&A) updates for this week.

February 15, 2019 WebPage Regulatory News

SEC Proposes Rule on Risk Mitigation Techniques for Uncleared SBS

SEC proposed a rule that would require the application of specific risk-mitigation techniques to portfolios of security-based swaps (SBS) that are not submitted for clearing.

February 15, 2019 WebPage Regulatory News

FSB Report Examines Financial Stability Implications of Fintech

FSB published a report that assesses fintech-related market developments and their potential implications for financial stability.

February 14, 2019 WebPage Regulatory News

US Agencies Amend Regulatory Capital Rule to Allow Phase-In for CECL

US Agencies (FDIC, FED, and OCC) adopted the final rule to address changes to credit loss accounting under the U.S. generally accepted accounting principles; this includes banking organizations’ implementation of the current expected credit losses (CECL) methodology.

February 14, 2019 WebPage Regulatory News

FASB Proposes Taxonomy Improvements for the Credit Losses Standard

FASB proposed the taxonomy improvements for the proposed Accounting Standards Updates on Targeted Transition Relief for Topic 326 (Financial Instruments—Credit Losses) and Topic 805 (on Business Combinations—Revenue from Contracts with Customers).

February 14, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2617