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

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476