This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses and final rules for Consultation Paper (CP) 30/16 ‘PRA fees and FSCS levies for insurers: proposals for a transitional approach in 2017/18’.
The PS is relevant to insurance firms falling into the A3 (general insurance) and A4 (life insurance) fee blocks and FSCS levy classes B1 (general insurance) and C1 (life insurance), the FSCS, (for the purposes of the FSCS levy only) the Society of Lloyd’s, and policyholders.
In CP30/16, the PRA proposed transitional arrangements that would be applied to the 2017/18 PRA fee and FSCS levy years for all insurance firms subject to fee blocks A3 and A4, and FSCS levy classes B1 and C1. The proposal meant that calculations for the 2017/18 fee and FSCS levy years would be based on the last set of Solvency I data received (returns received for the relevant insurance firms’ financial year ending during 2015).
The CP also proposed that adjustments to that data would be required where an insurance business transfer under Part VII of the Financial Services and Markets Act (FSMA) (or other such transfer under Part VIII of the Friendly Societies Act 1992) had occurred between the end of a firm’s financial year ending in 2015 and 31 December 2016. As well as this, where a relevant insurance firm has gone into run-off between the end of the firm’s financial year ending in 2015 and 31 December 2016, it may optionally provide submissions of updated data on a Solvency I calculation basis for the year ending in 2016. Relevant firms would need to provide relevant data on a Solvency I basis to the FCA by 28 February 2017.
The PRA received five responses to the consultation, generally supporting the proposals. Some respondents raised suggestions and questions which are discussed in Chapter 2 of this PS. The responses have not led to any changes to the proposals in the CP.
The appendices to this PS contain the final rules for a transitional approach in 2017/18, that makes changes to the Fees and Policyholder Protection Parts of the PRA Rulebook.
PRA fees and FSCS levies for insurers - transitional approach for 2017/18: responses to CP30/16 – PS37/16
- PRA RULEBOOK: SOLVENCY II FIRMS, NON SOLVENCY II FIRMS, NON-AUTHORISED PERSONS: POLICYHOLDER PROTECTION INSTRUMENT 2016
- PRA RULEBOOK: FEES (INSURANCE FIRMS TRANSITIONAL RULES) INSTRUMENT 2016