Update 20 February 2019
This SS was updated following publication of Policy Statement 4/19 ‘Solvency II: Adjusting for the reduction of loss absorbency where own fund instruments are taxed on write down’. The new policy will come into effect for all instruments issued on or after Thursday 21 February 2019.
Published on 20 March 2015
This supervisory statement is of interest to all UK Solvency II firms, the Society of Lloyd’s and firms that are part of a Solvency II group that will determine and classify capital instruments under the Solvency II own funds regime. This statement should be read alongside all relevant European legislation and relevant parts of the Prudential Regulation Authority Rulebook.
- prohibition on redemption of instruments within five years of the date of issue;
- liability management and capital reduction;
- principal loss-absorbency mechanism for Tier 1 instruments subject to limitation (‘restricted Tier 1’); and
- additional considerations for instruments intended to contribute to group own funds.