Review of Solvency II: Quantitative Impact Study (QIS)

This page sets out information regarding the PRA’s Quantitative Impact Study (QIS) and Qualitative Questionnaire, which will support the review of Solvency II. Firms should refer to this page for updates about the QIS. It it important to note the QIS seeks to analyse a wide range of potential policy design options and combinations. The QIS should not be taken as an indication of the Government's or PRA's preferred courses of action.

Latest QIS updates

21 October update: Thank you and next steps

On Wednesday 20 October 2021, a significant number of insurance firms submitted completed QIS templates. We recognise the resources and effort dedicated to completing the QIS on time, and would like to thank all those that took part. 

We will now begin to check and review this data and will contact individual firms where we have any questions. We are grateful for firms’ on-going involvement and engagement in the QIS. The InsuranceData@bankofengland.co.uk mailbox will remain open for any queries during this time.

We will look to organise a post-QIS submission industry roundtable before the end of the year. Further details will follow on this page.

  • 1 October update: Qualitative Questionnaire Q&A and roundtable event

    For clarification, we ask that firms complete the Main QIS template and Qualitative Questionnaire, and submit their return via the BEEDS portal by Wednesday 20 October 2021. For the name of the return, please use the full entity name and FRN of the firm followed by:

    • “QIS template” for the Main QIS template
    • “QIS Qualitative Questionnaire” for the Qualitative Questionnaire

    On Monday 27 September, we published a Q&A document that captures content discussed in the Qualitative Questionnaire roundtable event held on Tuesday 14 September. 

    We have also updated the Qualitative Questionnaire template to cross-reference further information on potential policy design options, designed to complement the Q&A document.

    Both the Qualitative Questionnaire Q&A and updated template can be found under ‘Links to QIS template(s) and instructions’. 

    We will hold a further roundtable event on Thursday 7 October. If your firm has not received an invitation and wishes to attend, please contact InsuranceData@bankofengland.co.uk with the contact details of the representative(s) from your firm that wish to attend. At this meeting we will: 

    • address questions on ambiguities in a small number of qualitative questions, that were raised at the Tuesday 14 September roundtable; and
    • give a presentation on our concerns over the current design of the matching adjustment.

    20 August Update: Quantitative Template Amendments or Corrections

    On Friday 20 August, and as detailed in the QIS Q&As, we made some amendments or corrections to the main quantitative QIS template and the QIS instructions. 

    We also published an unlocked quantitative QIS template to allow firms to use the template for their own internal analysis. Please note, it is important that firms submit their completed QIS templates using the locked version only.

    Both the updated quantitative QIS template and the unlocked version links can be found under Links to QIS template(s) and instructions.

    13 August Update: Qualitative Questionnaire Launch

    On Friday 13 August, we published the Qualitative Questionnaire. This aims to gather qualitative information to supplement the first part of the QIS launched on 20 July, and will support the policy development of other areas not included in the main QIS template. The deadline for submitting responses is Wednesday 20 October 2021.

    The Qualitative Questionnaire will complement the QIS by allowing us to undertake a broader analysis of areas for reform, beyond quantitative balance sheet impacts.  Specifically, the questionnaire will gather information for three key purposes:

    i. To support the development of reforms to make the regime more streamlined and/or flexible – this includes Matching Adjustment (MA) requirements; the internal model approval framework; and the Transitional Measure on Technical Provisions (TMTP). 

    ii. To understand the business impacts of potential policy design options, particularly how firms might respond to regulatory changes to the Risk Margin, MA, and internal model approval framework; and how these changes might support the objectives of the review.

    iii. To understand the costs of complying with the current regime, as well as the implementation costs of potential policy design options, for example the calculation of the Risk Margin and the MA.

    A link to the qualitative questionnaire can be found under ‘Links to QIS template(s) and instructions’ below.

    As before, we are writing to a number of firms through the Bank of England Electronic Data Submission (BEEDS) portal, inviting them to participate in the exercise to ensure that we have an appropriate breadth and level of coverage in the industry for our study. If you receive this invitation, we would ask that you prioritise resource to complete the exercise to the standard needed to inform policy making. We welcome responses from all other UK regulated firms should they wish to participate.

    We encourage participants to engage with the Qualitative Questionnaire early and provide any feedback or queries within the first few weeks of this publication. Please raise these to your usual supervisory contact or InsuranceData@bankofengland.co.uk.

    In early September, we will be hosting a roundtable event to cover general comments or questions regarding the Qualitative Questionnaire. Invitations will be sent to firms prior to the roundtable and details will be published on this webpage shortly. 

    30 July 2021: Second Roundtable Invitation

    On Thursday 5 August, we will be hosting a virtual roundtable to discuss MA, VA and TMTP calculations within the QIS.

    On Wednesday 28 July, we sent invitations to insurance firms with MA, VA or TMTP approvals, confirming that up to two representatives per firm would be able to attend. We encourage all invited firms to attend. If you have not received an invitation and believe it is in your firm’s interest to attend, please contact your relevant supervisor and InsuranceData@bankofengland.co.uk.

    If you are an advisory firm that is currently or likely to be involved in completing the QIS exercise then up to two representatives from your firm would be welcome to attend both (3 & 5 August) roundtables. Please contact InsuranceData@bankofengland.co.uk to arrange this.

    29 July 2021: First Roundtable Invitation

    On Tuesday 3 August, we will be hosting a virtual roundtable discussion to cover general comments or questions regarding the QIS instructions and templates. This will be followed by a focussed discussion on the Risk Margin elements of the QIS. 

    On Tuesday 27 July, we sent invitations to all insurance firms where we held contact details centrally, confirming  that up to two representatives per firm would be able to attend. We encourage all firms participating in the QIS to attend. If you have not received an invitation and would like to attend, please contact your relevant supervisor and InsuranceData@bankofengland.co.uk.

    20 July 2021: QIS Launch (Quantitative Template)

    On Tuesday 20 July 2021, we published the QIS for the Solvency II review – please see links to the materials below. The deadline for submitting responses is Wednesday 20 October 2021. 

    The QIS exercise will gather data to support the review of Solvency II. It should not be taken as an indication of the Government’s or our preferred courses of action.

    We are writing to a number of firms through the Bank of England Electronic Data Submission (BEEDS) portal inviting them to participate in the exercise to ensure that we have an appropriate breadth and level of coverage in the industry for our study. If you receive this invitation, we would ask that you prioritise resource to complete the exercise to the standard needed to inform policy making. We welcome responses from all other UK regulated firms should they wish to participate.

    We encourage participants to engage with the QIS early and provide any feedback or queries within the first few weeks of this publication. Please raise these to your usual supervisory contact or InsuranceData@bankofengland.co.uk. Please also refer to the QIS Q&A below for further information, which will be kept updated over the period. 

    In addition, we have published a Dear CEO letter that sets out our approach to the QIS, and the thinking on two key areas being assessed under it - the risk margin and the matching adjustment (MA). 

    In August, we will release a series of qualitative questions to inform our thinking about other aspects of Solvency II reform. 

Background: Solvency II Reform

On Thursday 1 July 2021 HMT published its Response to the Call for Evidence setting out the responses received and the next steps on the reform of Solvency II. 

On Tuesday 23 June 2020, the Government announced it would review certain features of the Solvency II regulatory regime for insurance firms. In October 2020, HM Treasury (HMT) invited all interested stakeholders to share views on the issues set out in the Call for Evidence. The Call for Evidence period closed on Friday 19 February 2021.

What is the Quantitative Impact Survey (QIS)?

The QIS is a data collection exercise that will assist our analysis of potential reform options. It will mainly focus on those areas that are quantifiable on an insurer’s balance sheet. It is important to note that the scenarios specified in the QIS do not in themselves represent reform proposals.

The QIS will cover three main areas: (i) the calculation of the Matching Adjustment; (ii) Risk Margin; and (iii) Transitional Measure on Technical Provisions (TMTPs). The QIS will also contain qualitative questions to gather information to support the development of some areas of Solvency II reform that are less straightforward to assess quantitatively.

What do I need to know?

The QIS was launched on Tuesday 20 July 2021 and firms have been asked to respond within three months. The QIS is relevant to all PRA-regulated insurance firms. Participation in the QIS is on a voluntary basis. However, given the importance of the Solvency II review on the UK insurance industry, we strongly encourage UK insurance firms from all sectors to participate. This will allow us to understand the potential impact of reforms on different insurance sectors, as well as the industry as a whole.

It is important for us to receive high quality data from the QIS, and so we ask that firms undertake an appropriate level of validation before it is submitted. The QIS is expected to be a significant technical undertaking for participating firms, especially Life Insurers. However, we have given careful consideration to only ask firms for data that in our view is necessary and useful, while having regards to the burden placed on firms participating in the QIS.  

QIS Launch (Quantitative Template) 

On Tuesday 20 July 2021, we published the QIS for the Solvency II review – please see links to the materials below. The deadline for submitting responses is Wednesday 20 October 2021. 

The QIS exercise will gather data to support the review of Solvency II. It should not be taken as an indication of the Government’s or PRA’s preferred courses of action.

We are writing to a number of firms through the Bank of England Electronic Data Submission (BEEDS) portal inviting them to participate in the exercise to ensure that we have an appropriate breadth and level of coverage in the industry for our study. If you receive this invitation, we would ask that you prioritise resource to complete the exercise to the standard needed to inform policy making. We welcome responses from all other UK regulated firms should they wish to participate.

We ask that firms complete the Main QIS template and Qualitative Questionnaire, and submit their return via the BEEDS portal by Wednesday 20 October 2021. For the name of the return, please use the full entity name and FRN of the firm followed by:

  • “QIS template” for the Main QIS template
  • “QIS Qualitative Questionnaire” for the Qualitative Questionnaire

We encourage participants to engage with the QIS early and provide any feedback or queries within the first few weeks of this publication. Please raise these to your usual supervisory contact or InsuranceData@bankofengland.co.uk. Please also refer to the QIS Q&A document below for further information, which will be kept updated over the period. 

In addition, we have published a Dear CEO letter that sets out our approach to the QIS, and the thinking on two key areas being assessed under it - the risk margin and the matching adjustment (MA). 

In August, we will release a series of qualitative questions to inform our thinking about other aspects of Solvency II reform. 

Qualitative Questionnaire Launch

On Friday 13 August, we published the Qualitative Questionnaire. This aims to gather qualitative information to supplement the first part of the QIS launched on Tuesday 20 July, and will support the policy development of other areas not included in the main QIS template. The deadline for submitting responses in Wednesday 20 October 2021.

The Qualitative Questionnaire will complement the QIS by allowing us to undertake a broader analysis of areas for reform, beyond quantitative balance sheet impacts. Specifically, the questionnaire will gather information for three key purposes:

  1. To support the development of reforms to make the regime more streamlined and/or flexible – this includes Matching Adjustment (MA) requirements; the internal model approval framework, and the Transitional Measure on Technical Provisions (TMTP). 
  2. To understand the business impacts of potential policy design options, particularly how firms might respond to regulatory changes to the Risk Margin, MA and internal model approval framework; and how these changes might support the objectives of the review.
  3. To understand the costs of complying with the current regime, as well as the implementation costs of potential policy design options, for example the calculation of the Risk Margin and the MA.

A link to the qualitative questionnaire can be found under ‘Links to QIS template(s) and instructions’ below.

As before, we are writing to a number of firms through the Bank of England Electronic Data Submission (BEEDS) portal inviting them to participate in the exercise to ensure that we have an appropriate breadth and level of coverage in the industry for our study. If you receive this invitation, we would ask that you prioritise resource to complete the exercise to the standard needed to inform policy making. We welcome responses from all other UK regulated firms should they wish to participate.

We encourage participants to engage with the qualitative questionnaire early and provide any feedback or queries within the first few weeks of this publication.

Please raise these to your usual supervisory contact or InsuranceData@bankofengland.co.uk

On the 14 September 9am to 10am we will be hosting a roundtable event to cover general comments or questions regarding the qualitative questionnaire. Invitations were sent to firms on 7 September. If your firm has not received an invitation and wishes to attend, please contact InsuranceData@bankofengland.co.uk with the contact details of the representative(s) from your firm that wish to attend. The agenda for the event will be:

  • Welcome and opening remarks
  • Overarching questions on the questionnaire
  • Opportunity to raise issues or questions on a sheet by sheet basis
  • Closing remarks

It is important to emphasise that the roundtable is not a replacement for completing the questionnaire. It is an opportunity for firms to engage with the PRA and each other in an efficient manner in order to gain clarity on any areas of it which may be unclear or challenging. 

We will endeavour to capture and potentially publish on our website, a list of questions raised which are sufficiently general and which we believe will be of value to the wider industry. Any questions that we do publish will be anonymised. The event itself will not be recorded.

Other requests to support the review of Solvency II

MA Asset and Liability Information Request

On Wednesday 16 June 2021, we released an information request through BEEDS to firms with a MA approval. The request asked for both granular asset data and asset and liability cashflow data, relating to the relevant firms’ MA Portfolios under the existing Solvency II regime.

This information request is not part of the QIS. However, it will help to inform our review of Solvency II, particularly on matters relating to the MA. Completion of the request is voluntary, however we strongly encourage firms that have approval to use the MA to participate. 

The MA asset and liability information request template is available for firms to complete.

If you have any questions, please refer to the MA asset and liability information request Q&A.

Contact

If you have any queries regarding the QIS, please refer to the QIS Q&A or contact InsuranceData@bankofengland.co.uk.
This page was last updated 21 October 2021

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