Featured Product

    PRA Consults on Matching Adjustments Under Solvency II

    October 25, 2017

    PRA published a consultation paper (CP21/17) proposing its expectations from firms in respect of the application of the matching adjustment. This consultation is the first in a short series of consultation papers on reforms to the implementation of Solvency II. The deadline for comments is January 31, 2018.

    This consultation is relevant to all UK Solvency II firms and to the Society of Lloyd’s and its managing agents, where they are applying or have applied to use the matching adjustment. The consultation paper also proposes to consolidate and update material previously set out in Directors’ letters, Executive Director’s letters, and feedback statements published during April 01, 2013 to February 15, 2016 in a new supervisory statement in Appendix 1. PRA proposes additional guidance in the following areas (with references to the relevant chapter in the draft Supervisory Statement):

    • Asset eligibility—demonstrating cash flow fixity (Chapter 2)
    • Criteria for assessing sufficient compensation (Chapter 2)
    • Restructuring asset cash flows using special purpose vehicles or SPVs (Chapter 2)
    • Trading in the matching adjustment portfolio (Chapter 7)
    • Consequences of breaches of matching adjustment requirements (Chapter 8)
    • Changes to matching adjustment portfolio approval (Chapter 9)

    The consultation paper has been developed by PRA as part of its work on adjustments to the insurance prudential framework in the light of experience following the UK introduction of Solvency II, including in areas recommended for reform by the Association of British Insurers and discussed with the Treasury Committee. Over the coming months, further consultation papers will follow in the series, including proposals on the minor model change process (December 2017) and  proposals to reduce the reporting burden on firms (January 2018). Furthermore, work is underway on the assessment of the feasibility of further simplification to the recalculation of the transitional measure on technical provisions and on the review of the external audit of Solvency and Financial Condition Report.


    Related Links

    Comment Due Date: January 31, 2018

    Keywords: Europe, UK, Insurance, Solvency II, Matching Adjustment, CP21/17, PRA

    Featured Experts
    Related Articles

    APRA Issues Guidance for Capital Management by Banks and Insurers

    APRA, in a letter to all authorized deposit-taking institutions and insurers, provides guidance on managing capital during the period of significant disruption caused by COVID-19.

    April 08, 2020 WebPage Regulatory News

    MAS Amends Notices on Residential Property Loans

    MAS published amendments to Notices 632, 632B, 645A, 825, 825B, 831A, 1106B, and 1115A related to the residential property loans in Singapore.

    April 07, 2020 WebPage Regulatory News

    US Agencies Clarify Reporting of Debt Restructurings Amid COVID Crisis

    US Agencies (CFPB, FDIC, FED, NCUA, and OCC), in consultation with the state financial regulators, issued a revised interagency statement on loan modifications by financial Institutions working with COVID-affected borrowers.

    April 07, 2020 WebPage Regulatory News

    US Agencies Announce Changes to CBLR Framework in Light of COVID-19

    US Agencies (FDIC, FED, and OCC) issued two interim final rules that make changes to the community bank leverage ratio (CBLR) framework and implement Section 4012 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

    April 06, 2020 WebPage Regulatory News

    BoE Publishes Version 2.0.0 of Capital+ XBRL Utility

    BoE published version 2.0.0 of the Capital+ XBRL Utility, along with the related release notes.

    April 06, 2020 WebPage Regulatory News

    ECB Updates Documentation on SHS Reporting by Banks

    ECB updated the documentation for banking groups subject to direct reporting of Securities Holdings Statistics Group (SHSG) data to ECB.

    April 06, 2020 WebPage Regulatory News

    HKMA Announces Initiative to Support SMEs Amid COVID-19 Outbreak

    HKMA issued a circular on a 100% Loan Guarantee Product under the Small and Medium-Sized Enterprise (SME) Financing Guarantee Scheme.

    April 06, 2020 WebPage Regulatory News

    CBUAE Announces Relief Measures to Address Impact of COVID-19

    CBUAE has announced a number of measures to support the economy amid COVID-19 outbreak and these measures will enter into force with immediate effect.

    April 05, 2020 WebPage Regulatory News

    EC Approves State Aid Schemes in the Context of COVID-19 Outbreak

    EC approved German, Greek, Maltese, Polish, Portuguese, Spanish, and Swedish State aid schemes to support the economy in the context of the COVID-19 outbreak.

    April 04, 2020 WebPage Regulatory News

    PRA and FCA Issue Statement on SM&CR Expectations During COVID Crisis

    PRA and FCA published a statement that sets out their joint approach to the Senior Managers and Certification Regime (SM&CR) for dual-regulated firms in light of the COVID-19 outbreak.

    April 03, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4961