This consultation paper seeks feedback on a draft supervisory statement that sets out the Prudential Regulation Authority’s (PRA) expectation of firms in relation to supervisory approval for the volatility adjustment (VA).
The statement is relevant to all UK Solvency II firms and to Lloyd’s.
Following public consultation, HM Treasury has decided to exercise supervisory approval for the volatility adjustment in the UK.
The PRA wishes to operate an effective and efficient process, and is therefore seeking views on its approach to supervisory approval. Firms may submit applications for approval to apply the VA from 1 April 2015. Firms may use the content of this draft supervisory statement to inform the preparation of their applications.
Further details on how to submit an application are on the webpage “Approvals and waivers under the Solvency II Directive ” on the Bank of England website.
Summary of proposals
The draft supervisory statement clarifies:
- the items that should be included in an application to use the VA;
- how the PRA will use the content of applications to assess whether the statutory conditions for approval to use the VA have been satisfied; and
- how the VA approval process will work, and its interaction with other Solvency II approval processes.
This consultation closed on 20 April 2015. Please address any comments or enquiries to CP11_15@bankofengland.co.uk.
The PRA will consider the feedback received and will publish the final supervisory statement at a later date.
Solvency II: supervisory approval for the volatility adjustment - CP11/15