Published on 12 July 2018
Solvency II: Group supervision - PS17/18
This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback on the responses to Consultation Paper (CP) 38/16 ‘Solvency II: Group supervision’, and the final Supervisory Statement (SS) 9/15 ‘Solvency II: Group supervision’.
This PS is relevant to all UK insurance firms within the scope of the Solvency II Directive (‘the Directive’) and to the Society of Lloyd’s.
The SS (see Appendix 1) sets out the PRA’s updated expectations for group supervision and incorporates the PRA’s letter ‘Solvency II: An update on implementation’ published on 25 July 2014. The letter will be archived following the publication of the updated SS.
Simultaneously, the PRA is publishing CP15/18 ‘Solvency II: Group own fund availability’ which sets out the PRA’s proposals to further amend SS9/15 for its expectations for assessments of the availability of own funds to cover the group solvency capital requirement. The proposals in CP15/18 provide details on certain aspects of how own funds should be assessed as available, and to address responses to CP38/16 on this aspect of the PRA’s proposed policy. The further consultation covers only material in section 5A (availability of group own funds) of the SS.
Summary of responses
The PRA received five responses to CP38/16. Responses focused mainly on firm’s compliance with group provisions, choice of calculation method, availability of own funds and group own funds brought in by deduction and aggregation.
Implementation and next steps
The policy in the revised SS takes immediate effect.
The policy contained in this PS has been designed in the context of the current UK and EU regulatory framework. The PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework, including changes arising once any new arrangements with the European Union take effect.
Policy Statement 17/18
Solvency II: Group supervision - CP38/16
In this consultation paper (CP), the Prudential Regulation Authority (PRA) sets out proposals to update Supervisory Statement (SS) 9/15 ‘Solvency II: group supervision’. The proposals in this CP follow on from CP20/16 ‘Solvency II: consolidation of Directors’ letters’, published in May 2016.
The consultation is relevant to all insurance firms within the scope of the Directive and to Lloyd’s.
Summary of proposals
The proposals in this CP are intended to clarify for firms which aspects of the PRA’s letter ‘Solvency II: An update on implementation’ published on 25 July 2014 on group supervision are now intended to have effect as ongoing supervisory expectations. The CP also includes proposals to address elements of the Solvency II legislation introduced after the publication of the relevant letters; including the Solvency 2 Regulations 2015 and to update it with references to the PRA Rulebook.
These proposals will result in the consolidation of PRA expectations in respect of Solvency II group supervision, as they are intended to be implemented in the form of an update to the current SS9/15.
This consultation closed on Tuesday 7 February 2017.