This supervisory statement is addressed to all UK firms that fall within the scope of Solvency II, and to Lloyd’s, including Lloyd's managing agents, rather than just the Society of Lloyd's. It sets out the Prudential Regulation Authority’s (PRA’s) expectations of firms and its general approach to the following European Insurance and Occupational Pensions Authority’s (EIOPA’s) Guidelines:
(i) Set 2 of the Solvency II Guidelines (‘the Guidelines’), published as final reports on 6 July 2015 and in all European Union official languages on 14 September 2015; and
(ii) the System of Governance and the Own Risk and Solvency Assessment (ORSA), published as final reports on 3 February 2015 and in all European Union official languages on 14 September 2015.
This statement has been subject to public consultation (see CP30/15 in Related Links) and reflects the feedback that was received by the PRA. It sets out the PRA’s expectation that all firms must comply with all of the Set 2, System of Governance and ORSA Guidelines. It also provides further commentary on certain Guidelines where additional considerations, including those set out in previous PRA supervisory statements, should be taken into account by firms
- recognition and valuation of assets and liabilities other than technical provisions;
- methods for determining the market shares for reporting;
- reporting for financial stability purposes;
- reporting and public disclosure; and
It does not address the expected EIOPA Guidelines relating to third-country branches as these have not yet been published in all official languages of the European Union. The PRA consulted on ‘Solvency II: third-country branches and pure reinsurance branches’ in CP31/15 in August 2015 (see Related links).
It is the PRA’s responsibility to make every effort to comply with EIOPA Guidelines and its intention is to comply with all of the Set 2, the System of Governance and the ORSA Guidelines. The PRA will take full account of the Guidelines in its ongoing supervision of the Solvency II regulatory framework.
Solvency II: applying EIOPA Set 2, System of Governance and ORSA Guidelines - SS41/15