Skip to main content
  • This website sets cookies on your device. To find out more about how we use cookies please refer to our Privacy and Cookie Policy. By continuing to use the site, we’ll assume that you are content for us to set these on your device.
  • Close
Home > Prudential Regulation Authority > Non-Directive firms
 

Non-Directive firms

Smaller insurers  |  Solvency II  |  Non-Directive firms  |  FAQs  |  Seminars

Under Solvency II, non-Directive firms in general, are those with gross premium income below €5 million and gross technical provisions of less than €25million. These are not the only criteria that determine whether a firm is out of scope of Solvency II and firms should therefore review Chapter 2 of the Insurance General Application Part of the PRA Rulebook where in doubt.

The new prudential regime for non-Directive firms came into effect on 1 January 2016, alongside the Solvency II regime. Most of the firms outside the scope of Solvency II are mutuals and many of them are registered as friendly societies.

Non-Directive firms are subject to the rules in the Non-Solvency II firms sector of the PRA Rulebook which came into effect on 1 January 2016.

Non-Directive firms are free to apply for authorisation under Solvency II (ie opt-in). In such cases, the rules that apply to Solvency II firms will apply to these firms.

Firms are strongly encouraged to use the 'Bank of England Electronic Data Submission' (BEEDS) portal to submit the required regulatory returns under the non-Directive firm regime.

Firms have been asked to nominate a principal user who will be responsible for making their firm's submissions to the BEEDS portal. The Bank of England will liaise with the firm’s nominated principal user for all matters related to the BEEDS portal. Any firm wishing to make secure submissions via the BEEDS portal, that has not yet notified the Bank of England, should contact PRA.FirmEnquiries@bankofengland.co.uk.

Firms can also make submissions via email to insurancedata@bankofengland.co.uk

Regime developments 2016

On Wednesday 23 November 2016, the PRA and FCA published PRA CP42/16 / FCA CP16-34 'Authorisation and supervision of insurance special purpose vehicles'. The CP is relevant to all parties who wish to apply to the PRA for, or have obtained authorisation as, an insurance special purpose vehicle (ISPV). It is also relevant to parties who wish to apply to the FCA for registration of a Protected Cell Company (PCC), and to insurers seeking to use UK ISPVs as risk mitigation in accordance with Solvency II.
 
The deadline for insurers to submit their Scope of Responsibilities (SoRs) is Wednesday 7 September 2016 as set out in Key Function Holder - Notifications 6.3 in the PRA Rulebook. Insurance firms that do not submit their SoR form by this date are reminded that SoR forms for Solvency II and non-Solvency II firms can be found on the Senior Insurance Managers Regime - submitting, amending, withdrawing page of the website.
 
Large non-Solvency II firms should send their SoRs to: PRA-ApprovedPersons@bankofengland.co.uk as soon as possible. Small non-Solvency II firms are not required to submit SoRs to the PRA.
 
On Wednesday 31 August 2016 the PRA reminded insurance firms of the Wednesday 7 September 2016 deadline for submitting their Scope of Responsibilities (SoRs) as set out in Key Function Holder - Notifications 6.3 in the PRA Rulebook. SoR forms for Solvency II and non-Solvency II firms can be found on the Senior Insurance Managers Regime - submitting, amending, withdrawing page of the website. For details on completing SoRs, firms are referred to the update issued on 7 July 2016.
 
Large non-Solvency II firms should send their SoRs to: PRA-ApprovedPersons@bankofengland.co.uk by Wednesday 7 September 2016. Small non-Solvency II firms are not required to submit SoRs to the PRA.
 
On 8 August 2016, the PRA reminded firms of the deadline of Wednesday 7 September for large non-Directive firms (NDFs) to submit their Scopes of Responsibilities (SoRs). The key requirements for insurers submitting their SoRs are highlighted below:
  • All Senior Insurance Management Functions (SIMFs) that grandfathered into the new regime on 7 March 2016 are required to provide to the PRA a completed SoR form by Wednesday 7 September 2016.
  • All current key function holders (KFHs) who are also in a Financial Conduct Authority (FCA) Controlled Function (CF), are expected to provide to the PRA a completed SoR by Wednesday 7 September 2016 if they haven't already done so.
  • All current KFHs, other than: i) 'notified non-executive directors (NEDs)' as defined in the PRA Rulebook; ii) PRA SIMFs; or iii) FCA CFs, are required to have provided a completed Form M to the PRA by Wednesday 7 September 2016.
  • Any notified NEDs who were appointed after 7 March 2016 should submit a Form M to the PRA as soon as reasonably practicable after the appointment of the NED.
  • No further information is required from notified NEDs who were already in post on 7 March 2016.
  • No information is required from small NDFs at this time.
Please refer to the update below issued on 7 July 2016, which provides links to information and details on how firms should submit SoRs and other forms.
 
On Thursday 7 July 2016 the PRA reminded insurance firms of the Wednesday 7 September 2016 deadline for submitting their Scope of Responsibilities (SoRs) as set out in Key Function Holder - Notifications 6.3 in the PRA Rulebook. SoR forms for Solvency II and non-Solvency II firms can be found on the Senior Insurance Managers Regime - submitting, amending, withdrawing page of the website. For details on completing SoRs, non-directive firms are referred to:
 
The SoRs will be looked at as part of a firm's supervisory cycle.
 
Large non-Solvency II firms should send their SoRs to: PRA-ApprovedPersons@bankofengland.co.uk by Wednesday 7 September 2016.
Small non-Solvency II firms are not required to submit SoRs to the PRA.
 
On 30 June, the PRA issued Policy Statement 19/16 'Reporting requirements for non-Solvency II insurance firms'. The appendices include reporting templates for non-Solvency II firms, as follows:
 
 
On 3 May, the PRA issued Consultation Paper 18/16 'Reporting requirements for non-Solvency II insurance firms'. This consultation will close on Monday 13 June 2016. 

Regime developments 2015

On 9 December, the PRA issued a letter on the implementation of the Senior Insurance Managers Regime for the attention of non-Solvency II insurance firms.

Letter to small non-Solvency II insurance firms

On 20 November 2015, the PRA issued three new publications of interest to non-Solvency II insurance firms. Policy Statement 26/15 includes grandfathering forms for small and large non-Solvency II firms, available here.

The prudential regime, and implementation of the Senior Insurance Managers Regime, for non-Solvency II firms – PS26/15

Non-Solvency II insurance companies – Capital assessments - SS43/15

Capital extractions by run-off firms within the general insurance sector – CP42/15

On 13 August 2015, the PRA issued the following publication of interest to non-Solvency II insurance firms.

The Senior Insurance Managers Regime: a streamlined approach for non-Solvency II firms - PS21/15

Non-Directive firms with assets of more than £25 million in respect of regulated activities should pay particular attention to the Senior Insurance Managers Regime rule as set out in PS26/15.

Contact us

For all routine supervisory queries contact the Firm Enquiries Function:

Phone:  020 3461 7000
Email:   PRA.FirmEnquiries@bankofengland.co.uk

Share