PRA Publishes Policy Statement on Group Supervision Under Solvency II
PRA published a policy statement (PS9/19) that provides feedback on responses to the consultation paper CP15/18 and the final supervisory statement SS9/15 (Appendix) on group supervision under Solvency II. SS9/15 sets out the updated expectations for group supervision and incorporates the PRA expectations for assessments of the availability of own funds to cover the group Solvency Capital Requirement (SCR), as set out in CP15/18. The policy in the updated SS9/15 takes immediate effect.
The consultation took place from July to November 2018 and PRA received one response to CP15/18 that highlighted a minor drafting point that has been corrected in the final SS9/15. PRA does not consider the change made to the draft policy to be significant and PRA has not reassessed the cost-benefit analysis or impact on mutuals. This policy statemetn is relevant to all UK insurance firms in the scope of the Solvency II Directive and to the Society of Lloyd’s.
SS9/15 was amended to clarify that in assessing group own funds availability, the solo SCR should no longer be presumed to be a barrier to availability. SS9/15 clarifies that PRA expects such availability analysis to be provided only where a group insurer is based in a jurisdiction that is not subject to a regime that is similar to, and not built on the same principles in relation to capital requirements and quality of capital at solo level as, the UK solvency regime. SS9/15 should be read in conjunction with the relevant European legislation, the Group Supervision Part of the PRA Rulebook, the Solvency II Regulations 2015, and the PRA insurance approach document.
Related Links
Keywords: Europe, UK, Insurance, Solvency II, Group Supervision, SCR, PS9/19, CP15/18, Own Funds, PRA
Featured Experts
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Cassandra Hannibal
IFRS 17 subject matter expert; actuary; risk management and capital projection specialist
Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Related Articles
BoE Clarifies Approach to Treatment of Payment Holidays on Form PL
BoE published a statistical notice (Notice 2020/9) explaining the approach for treatment of payment holidays on the profit and loss return or Form PL.
BoE Provides Reporting Update on Form AS and Form FV
BoE updated the known issues document for the statistical reporting Forms AS and FV.
FED Announces Capital Requirements for Large Banks
FED announced individual capital requirements for 34 large banks and these requirements go into effect on October 01, 2020.
SRB Publishes Guidance on Implementation of Bail-In Tool
SRB published a set of documents to give operational guidance to banks on implementation of the bail-in tool.
BIS Publishes Update on G20 TechSprint Initiative
BIS published an update on the G20 TechSprint Initiative, which was launched in April 2020 and aims to highlight the potential for technologies to resolve regulatory compliance (regtech) and supervisory (suptech) challenges.
OSFI Provides Update on Implementation of IFRS 17 in Canada
OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts.
EBA Provides Clarity on Implementation of Guidance on COVID Reporting
EBA updated the report on the implementation of selected COVID-19 policies.
FSI Note Discusses Challenges Associated with COVID Relief Measures
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
BCBS Consults on Principles for Operational Risk and Resilience
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
BoE Updates Template and Definitions for Form ER
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
