In September 2013 the European Insurance and Occupational Pensions Authority (EIOPA) published the final guidelines for the preparation of Solvency II (‘the guidelines’). The guidelines cover four areas which EIOPA considers fundamental to ensure effective preparation and convergence in preparations for Solvency II, starting from 1 January 2014.
Summary of key issues covered by the consultation paper
In this consultation, the Prudential Regulation Authority (PRA) provides clarification on the:
i. expectation of firms in respect of the guidelines as they prepare for Solvency II;
ii. approach to implementing the guidelines; and
iii. interpretation of aspects of the guidelines.
In considering its strategic approach against the guidelines the PRA has:
- focused on the outcomes the guidelines are intended to achieve;
- focused on their preparatory nature, the fact that progress is intended to be incremental and that firms’ preparations can reflect that;
- sought to achieve the outcomes intended by the guidelines in a way which is consistent with existing provisions in the PRA Handbook, current expectations of firms and the Supervisory Approach;
- not sought to draft new rules or set substantially new expectations of firms; and
- been proportionate in the application of the guidelines to minimise the risk of periods of dual running.
Many of the guidelines represent good practice in conformity with existing rules and should not present an additional burden for firms. As it did when developing ICAS+, the PRA will consider ways that firms may be able to use their preparatory Solvency II work to meet existing regulatory requirements.
It is intended that the material in this consultation paper will be adopted by the PRA as a Supervisory Statement.
The consultation closed on 15 November 2013.
The Supervisory Statement relating to this Consultation Paper was issued on 12 December 2013.