PRA Proposes Amendments on Longevity Risk Transfers Under Solvency II
PRA published the consultation paper CP3/19, which sets out proposals to update the supervisory statement (SS18/16) on longevity risk transfers under Solvency II. PRA proposes to change its expectations for pre-notification of longevity risk transfers and hedge arrangements and to update the key risks arising from longevity risk transfers. Comments are requested by May 06, 2019. CP3/19 is relevant to PRA-authorized UK firms that fall within the scope of the Solvency II Directive and to the Society of Lloyd’s.
PRA proposes to update SS18/16 to change its expectations for how firms notify PRA of new longevity risk transfer arrangements and to highlight an additional key risk (basis risk) that should be included in firms’ assessments of the residual risks these transactions give rise to. The proposed changes differentiate between the level of pre-notification expected for large and/or complex transactions and other transactions. For large and/or complex transactions, which are defined in the updated SS18/16, PRA does not propose to change how firms engage with PRA in advance of their execution. However, for other transactions, PRA proposes to streamline the notification process by enabling firms to report these via a template. In addition to simplifying and standardizing the information firms are required to provide to PRA, this will also remove the need for the information to be reviewed by PRA in advance.
Related Links
Comment Due Date: May 06, 2019
Keywords: Europe, EU, Insurance, Solvency II, Longevity Risk Transfers, Proportionality, Pre-notification Expectation, CP3/19, SS18/16, PRA
Featured Experts
Paul McCarney
Insurance product strategist; insurance domain expert; extensive experience developing risk assessment frameworks for insurers
Brian Robinson
Actuary; risk management specialist; corporate and capital modelling expert
Previous Article
IMF Paper Examines Dynamics of NPLs During Banking CrisesRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
