Featured Product

    PRA Launches 2019 Stress Test Exercise for Life and General Insurers

    June 18, 2019

    PRA has launched the biennial insurance stress test and is asking the largest regulated life and general insurers to provide information about the impact of a range of stress tests on their business. The stress test includes an exploratory exercise in relation to cyber underwriting and climate change. PRA has also published the final scenario specifications, guidelines, instructions, and templates for both life insurance and general insurance stress tests. The deadline for submission for Sections A and B is September 30, 2019 and for submission for Section C is October 31, 2019.

    For general insurers, PRA will be coordinating some of the scenarios with the Bermuda Monetary Authority. Many London market insurers are exposed to risks similar to those based in Bermuda; furthermore, UK-based insurers cede a significant proportion of risks to Bermuda-based reinsurers. This exercise will enhance understanding of the interconnectedness between the two jurisdictions in the event of a stressed scenario. The Insurance Stress Test 2019 is split into two broad parts:

    • Sections A and B are core stress test scenarios. Section A contains a scenario that reflects a downturn in the economic environment and section B contains a set of severe but conceivable scenarios specific to the business models of life and general insurers.
    • Section C is not a stress test; it is an exploratory scenario and instead it is designed to capture information about how different firms are exposed to difficult-to-assess risks—for example, climate change. 

    The annex to the PRA letter summarizes the main changes to the instructions and templates, following the PRA request for technical input in April 2019. At a sector level, this exercise will allow PRA to assess market resilience and to be better prepared in the event similar scenarios were to occur. At a firm level, the Insurance Stress Test 2019 will inform the PRA view of a firm's risk management systems. PRA will publish a summary of the overall stress test results but no individual firm results will be made public.

     

    Related Links

    Submission Deadline: September 30, 2019 (Sections A & B); October 31, 2019 (Section C)

    Keywords: Europe, UK, Insurance, Life Insurers, General Insurers, Stress Testing, Climate Change Risks, Cyber Risk, Scenarios, Instructions, Guidelines, PRA

    Featured Experts
    Related Articles
    News

    EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio

    EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.

    November 19, 2020 WebPage Regulatory News
    News

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.

    November 19, 2020 WebPage Regulatory News
    News

    IASB Begins First Phase of Post-Implementation Review of IFRS 9

    IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Report Examines Progress in Resolvability of Systemic Institutions

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.

    November 18, 2020 WebPage Regulatory News
    News

    EBA Benchmarks National Insolvency Frameworks Across EU

    EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Reports Assess Impact of Pandemic on Financial Stability

    FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.

    November 17, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Implementation of Capital Review Changes

    RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.

    November 17, 2020 WebPage Regulatory News
    News

    IASB Announces Andreas Barckow as the New Chair from July 2021

    The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.

    November 17, 2020 WebPage Regulatory News
    News

    HKMA Consults on Capital Rules for Bank Equity Investments in Funds

    HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.

    November 17, 2020 WebPage Regulatory News
    News

    ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA

    ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).

    November 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6153