In its approach document, the PRA made a commitment to recast the Handbook inherited from its predecessor, the Financial Services Authority (FSA). In addition, the PRA has recently adopted final rules to implement Solvency II. Therefore, the PRA is now considering the regime for firms outside the scope of Solvency II and how to carry forward requirements for these firms into the new PRA Rulebook.
Summary of proposals
This consultation paper (CP) sets out proposals for new Parts of the PRA Rulebook that would apply only to insurance firms that are outside the scope of Solvency II from 1 January 2016. Collectively, these firms are referred to as non-Directive firms (NDFs).
The scope of application of each Part reflects how the rules currently apply to NDFs. Therefore there are separate Parts of the Rulebook for friendly societies and other insurers. The exceptions are the Non-Solvency II Firms - Governance, Non-Solvency II Firms - Actuarial Requirements, Non-Solvency II Firms - With-Profits, Non-Solvency II Firms - Run-Off Operations and Non-Solvency II Firms – Transitional Measures Parts which contain rules for all NDFs.
This consultation also proposes consequential amendments necessary to reflect the adoption of the Solvency II Firms Sector of the PRA Rulebook and have been presented alongside the NDF rules to aid analysis of the proposed changes.
This consultation closes on Monday 12 October 2015.
On 20 November 2015 the PRA published final policy in PS26/15 – The prudential regime, and implementation of the Senior Insurance managers Regime, for non-Solvency II firms, and the Supervisory Statement 43/15 – Non-Solvency II insurance companies – Capital assessments.
Due to the size of the documents and to be helpful to readers, the PRA has split the CP into two files. The Consultation Paper also includes Appendix 4. Appendices 1, 2 and 3 are attached separately.