In this Consultation Paper (CP), the Prudential Regulation Authority (PRA) sets out some proposed updates to its approach and expectations in relation to the authorisation and supervision of insurance special purpose vehicles (ISPVs). The proposals would make amendments to the Insurance Special Purpose Vehicles Part of the PRA Rulebook (Appendix 1), including Supervisory Statement (SS) 8/17 ‘Authorisation and supervision of insurance special purpose vehicles’ (Appendix 2) and the Multi-arrangement insurance special purpose vehicle (MISPV) New Risk Assumption Notification Form (Appendix 3).
The CP is relevant to parties who wish to apply for, or have obtained authorisation as, an ISPV. It is also relevant to insurers or reinsurers seeking to enter into arrangements with UK ISPVs as a form of risk mitigation.
The proposals in this CP aim to provide further clarity and elaborate on certain additional aspects of the PRA’s approach and expectations in relation to the authorisation and supervision of ISPVs. The Solvency II requirements in relation to ISPVs have not changed during this period but the PRA and applicants have gained experience of operating the regime in practice. The PRA considers that it would be helpful to update SS8/17 to reflect the experience gained over this period.
Responses and next steps
This consultation closed on Tuesday 3 December 2019. The PRA invites feedback on the proposals set out in this consultation, and on whether there are any other areas where further clarification on the PRA’s approach to the authorisation or supervision of ISPVs would be useful. Please address any comments or enquiries to CP19_19@bankofengland.co.uk.
The PRA notes that there is some potential cross over in text between the proposed updates to SS8/17 and the ISPV – FAQs, however, the main focus of this consultation is the updates to SS8/17, not the FAQs, and so we are not inviting responses on the FAQs in and of themselves. We recognise, however, that consultation responses relating to the SS may also be relevant to the FAQs. Therefore the FAQs may change in light of/in line with the updates to SS8/17, once we have considered the consultation responses.
Pending consideration of the responses to the consultation, the PRA proposes that the draft changes take effect from the date of publication of the final policy.