Featured Product

    PRA Seeks Input and Issues Specifications for Insurance Stress Tests

    April 15, 2019

    PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019. PRA has also published scenario specifications, guidelines, instructions, and templates for both life insurance and general insurance stress tests. Feedback is being sought on all aspects of this exercise from firms and other industry participants by May 31, 2019. Following consideration of the technical input, PRA intends to issue a formal announcement to request firms’ participation on July 01, 2019 to complete this exercise by September 30, 2019.

    General insurers will be most familiar with this exercise, as it represents an evolution of the stress testing exercises conducted in 2015 and 2017. For general insurers, PRA will be running a number of scenarios jointly with the Bermuda Monetary Authority (BMA), reflecting commitment to transparency, supervisory cooperation, and information-sharing by both Authorities, in line with the Insurance Core Principles (ICP) of IAIS. This joint exercise will allow PRA to understand, in more depth, the interdependencies between London Market and Bermuda-based reinsurers. For life insurers, this exercise captures potential risks that were not fully covered under last year’s EIOPA stress test.

    Along with these market-wide stress tests, PRA will also be requesting a climate scenario designed to provide additional market impetus in this area and to inform the development of a consistent and effective approach to climate-focused scenario analysis. PRA is specifically requesting feedback and technical inputs on the following aspects:

    • Clarity of the instructions and feasibility of the timetable—specifically whether there are any areas that require further explanation or clarification
    • Any concerns on the availability of the information to complete the outputs required in the template
    • For Scenario 1 ("Downturn in the economic environment"), what are the pros and cons of the two options outlined for the credit downgrade event
    • For general insurers only, any specific comments relating to the joint exercise with BMA


    Related Links

    Comment Due Date: May 31, 2019

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

    Featured Experts
    Related Articles

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    MFSA Sets Out Supervisory Priorities, Issues Reporting Updates

    The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023

    March 02, 2023 WebPage Regulatory News

    German Regulators Issue Multiple Reporting Updates for Banks

    Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8806