The European Insurance and Occupational Pensions Authority (EIOPA) published the Set 1 Solvency II Guidelines on 2 February 2015. It is the PRA’s responsibility to make every effort to comply with EIOPA Guidelines and its intention is to comply with all the Set 1 Guidelines. The PRA will, therefore, be taking full account of the Guidelines in its ongoing supervision of the new Solvency II regulatory framework. This consultation paper includes a draft supervisory statement which is relevant to all UK firms within the scope of Solvency II and to the Society of Lloyd’s. The statement sets out the PRA’s expectations of firms in relation to the EIOPA Set 1 Guidelines.
Summary of the content of the CP
The PRA expects firms to comply with all Set 1 Guidelines that apply to them in a proportionate manner in accordance with the principles set out in the Solvency II Directive. The Guidelines that the draft supervisory statement provides further commentary on are: ancillary own-funds; classification of own-funds; ring-fenced funds; treatment of related undertakings, including participations; loss-absorbing capacity of technical provisions and deferred taxes; and group solvency calculation.
This consultation closed on Thursday 19 March 2015.