In this consultation paper (CP) the Prudential Regulation Authority (PRA) proposes a draft supervisory statement setting out the PRA’s expectations on firms and the Society of Lloyd’s in relation to changes to internal models and extensions to the scope of internal models that have been approved under Solvency II.
This CP is relevant to insurance firms with an internal model approval under Solvency II. It may also be of interest to UK insurance firms seeking approval to use an internal model in the future and also to UK subsidiaries of EEA or non-EEA groups.
Summary of proposals
The proposals in this CP contain the PRA’s expectations on firms in relation to: changes to internal models; changes to the policy for changing the internal model; and extensions to the scope of internal models.
The proposals describe the PRA’s expectations of firms before and during a model change application, the PRA’s expectations of the quality of firms’ model change applications, and the information the PRA expects to be provided with a model change application.
The PRA welcomed views on this consultation up to Friday 5 August 2016.