PRA Proposes to Update Approach for Supervision of Insurance SPVs
PRA published a consultation paper (CP19/19) that proposes updates to its approach and expectations in relation to the authorization and supervision of insurance special purpose vehicles (ISPVs or insurance SPVs). The proposal involves amendments to the Insurance Special Purpose Vehicles Part of the PRA Rulebook (Appendix 1). It also covers amendments to the supervisory statement (SS8/17) on authorization and supervision of ISPVs (Appendix 2) and the New Risk Assumption Notification Form for multi-arrangement ISPV or MISPV (Appendix 3). This consultation in CP19/19 closes on December 03, 2019. Pending consideration of the responses to the consultation, PRA proposes that the draft changes take effect from the date of publication of the final policy.
CP19/19 is relevant to parties that wish to apply for, or have obtained authorization as, an ISPV. It is also relevant to insurers or reinsurers seeking to enter into arrangements with UK ISPVs as a form of risk mitigation. The proposals in CP19/19 aim to provide further clarity and elaborate on certain additional aspects of the PRA approach and expectations in relation to the authorization and supervision of ISPVs. The Solvency II requirements in relation to ISPVs have not changed but PRA and the applicants have gained experience of operating the regime in practice. PRA considers that it would be helpful to update SS8/17 to reflect the experience gained over this period.
PRA notes that there is some potential cross-over in text between the proposed updates to SS8/17 and the frequently asked questions (FAQs) on ISPVs. However, the main focus of this consultation is the updates to SS8/17, not the FAQs; therefore, PRA is not inviting responses on the FAQs. However, consultation responses may also be relevant to the FAQs. Consequently, the FAQs may change in line with the updates to SS8/17, once the consultation responses have been considered.
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Comment Due Date: December 03, 2019
Effective Date: Publication Date of Final Policy (Proposed)
Keywords: Europe, UK, Insurance, Reinsurance, Solvency II, ISPV, PRA Rulebook, CP 19/19, SS8/17, Special Purpose Vehicle, PRA
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