PRA Issues Policy Statement on Group Supervision Under Solvency II
PRA published a policy statement (PS17/18) that provides feedback on the responses to the consultation paper CP38/16 and the final supervisory statement SS9/15 on group supervision under Solvency II. The policy in the revised SS9/15 takes immediate effect. PRA also published CP15/18, which sets out the proposals to further amend SS9/15 regarding its expectations for assessments of the availability of own funds to cover the group solvency capital requirement. Comments on CP15/18 are requested by November 12, 2018.
SS9/15 (Appendix 1 of PS17/18) sets out the updated expectations for group supervision and incorporates the PRA letter titled "Solvency II: An update on implementation," which was published in July 2014. CP15/18 proposes an approach for the determination of the availability of group own funds and covers expectations from firms in presenting relevant analysis to PRA. The proposals in CP15/18 provide details on certain aspects of how own funds should be assessed and to address responses to CP38/16 on this aspect of the proposed policy of PRA. CP15/18 covers only material in section 5A (availability of group own funds) of the SS9/15.
In 2016, PRA had published CP38/16, which consulted on a number of updates to the supervisory approach for group supervision, including the choice of calculation method available to insurance groups, entities excluded from the scope of group supervision, single own risk and solvency assessment reports (ORSAs), single group solvency and condition reports (SFCRs), responsibilities of the relevant insurance group undertaking, and group supervision in the absence of third-country equivalence. These proposed policy changes were subsequently reflected in the updated SS9/15. Further to these amendments, proposals in CP15/18 would better align the PRA policy and supervisory expectations with the point of view put forward by EIOPA regarding group own funds availability, through its answer to a question posed in late 2017.
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Comment Due Date: November 12, 2018 (CP15/18)
Effective Date: July 12, 2018 (SS9/15)
Keywords: Europe, UK, Insurance, Solvency II, Group Supervision, Group Own Funds, PS17/18, SS9/15, CP15/18, PRA
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