HM Treasury Extends Consultation Dates for FRF and Solvency II Reviews
HM Treasury extended the consultation period on Phase II of the Future Regulatory Framework (FRF) Review, from January 19, 2021 to February 19, 2021. Additionally, the comment period for the review of Solvency II regime in UK was extended from January 19, 2021 to February 19, 2021.
The Future Regulatory Framework Review was established to determine how the overall approach to regulation of financial services needs to adapt to the new position of UK outside the EU and to ensure the regulatory framework is fit for the future. After focusing on the specific issue of coordination between the UK regulatory authorities in Phase I of the review, the government has now moved to Phase II, which will examine the broader regulatory framework for regulation of financial services in the UK. The consultation proposes an overall approach to the regulation of financial services, built on the existing Financial Services and Markets Act 2000 (FSMA) model, which the government believes should form the foundation of the future regulatory framework. However, at this stage, it does not present a full package of proposals, which will be part of the second stage of Phase II. Under these proposals, PRA and FCA will be responsible for designing and implementing the regulatory standards that apply to financial services firms and markets using their existing rule-making powers in FSMA.
The review of Solvency II regime addresses potential areas for reform that could not only improve the efficiency and effectiveness of the application of the UK prudential regulatory regime, but also allow it to better recognize the unique features of the UK insurance sector. The review of Solvency II will consider how the current prudential regulatory framework can be improved to ensure that it provides for an appropriate amount of capital for the insurance sector, for a high degree of policyholder protection, and for suitable standards of governance, risk management, and transparency. Views are also sought on how this regime can contribute to the climate change objectives of UK government. The October 2020 consultation is the first stage of the review of Solvency II, which will also be informed by the recent international prudential regulatory developments.
Related Links
Comment Due Date: February 19, 2021
Keywords: Europe, UK, Banking, Insurance, Securities, PMI, Brexit, Solvency II, Future Regulatory Framework, FSMA, Solvency II Review, HM Treasury
Featured Experts

Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist

Cassandra Hannibal
Life insurance actuary; risk management and economic capital specialist

Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Previous Article
GHOS Endorses Coordinated Approach to Mitigate COVID Risks for BanksRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
HKMA Announces Launch of Data Repository on Sustainable Finance
The Hong Kong Monetary Authority (HKMA) announced that the Green and Sustainable Finance (GSF) Cross-Agency Steering Group has launched the information and data repositories and outlined the progress made in advancing the development of green and sustainable finance in Hong Kong.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
NGFS Report on Integration of G-Cubed Model into NGFS Scenarios
The Network for Greening the Financial System (NGFS) published a report that explores the feasibility of integrating the G-Cubed general equilibrium model into the NGFS suite of models.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.