This consultation paper (CP) seeks views on a draft supervisory statement which sets out the PRA’s expectations of firms, and provides further clarity in relation to applying for certain Solvency II approvals. It also provides details regarding the PRA’s pre-application process for approval to use the matching adjustment (MA).
This CP is of primary interest to all UK insurance firms within the scope of Solvency II, including mutuals and the Society of Lloyd’s.
Summary of the content of the CP
Chapter 1 of CP23/14 introduces the draft supervisory statement and details the PRA’s statutory obligations.
Chapter 2 specifies the PRA’s expectations and provides guidance on applying for the following approvals:
- Internal model.
- Solvency II approvals which Solvency II Regulations (Delegated Act and Implementing Technical Standards) detail legal requirements including the MA, ancillary own funds and undertaking specific parameters.
- Other approvals including: exclusion of an entity from the scope of group supervision; single group own risk and solvency assessment; and solvency and financial condition report dispensation.
- The calculation method for the group solvency capital requirement.
Chapter 3 details the PRA’s pre-application process for the MA which will allow the PRA to determine whether a firm’s draft application for MA approval is likely to meet the requirements of the formal application and provide feedback where the PRA determines work is still required. Submissions are requested from Monday 1 December 2014 – Tuesday 6 January 2015. Firms should advise usual supervisory contacts of their intention to participate by 30 November 2014.
The consultation closed on Friday 9 January 2015.
The appendix to CP23/14 has been removed as the tables and checklists have been finalised following consultation. All finalised tables and checklists formerly available within this annex can be found on the page Approvals and waivers under the Solvency II Directive within the transaction documents they support.