Update 24 June 2020: On Monday 23 March 2020, the PRA announced that as part of the Bank’s response to Covid-19, the Regulatory Supervisory Report (RSR) is not required for year-end 2019. This applies to firms with a Tuesday 31 December 2019 year-end, or year-ends after that date but before Wednesday 1 April 2020.
This update provides clarification for RSR submissions for year-end 2020 onwards.
The PRA considers that the existing RSR cycle (namely, a full report at least every three years and in summary every year) will continue. Therefore, firms with year-ends Tuesday 31 December 2019 or after that date but before Wednesday 1 April 2020 that were due to submit a full report for year-end 2019 will be required to submit summary reports for year-end 2020 and year-end 2021, and a full report for year-end 2022.
In line with the update on 16 April 2020 below, the PRA considers Covid-19 to be a major development, and therefore would expect year-end 2020 RSR reports to include information on the impact of Covid-19.
Update 16 April 2020: The PRA does not object to firms taking a view that in complying with rule 3.1(2) of the Technical Provisions part of the PRA Rulebook, technical provisions at year end 2019 would not be updated for the subsequent impact of Covid-19. This approach would mean that Covid-19 would not be listed as a material difference in technical provisions between Solvency II and the financial statements at year end 2019.
The decision to publicise the PRA’s non-objection to such a treatment for year end 2019 reflects the high levels of uncertainty that currently exist in relation to the impact of Covid-19. It also takes into account the fact that firms are required to disclose information on the nature and effects of any major development that significantly affects the relevance of the information in the Solvency and Financial Condition Report (Rule 5.1 of the reporting part of the PRA rulebook). The PRA considers Covid-19 to be a major development. Based on feedback from stakeholders, this approach for year end 2019 would be expected to lead to a more consistent approach between firms and therefore improved transparency from regulatory reporting.
This statement has been drafted in the context of the exceptional circumstances arising out of Covid-19. The PRA expresses no view with this statement as to an appropriate treatment for technical provisions in relation to other circumstances.
The PRA requests that firms planning to adjust year end 2019 technical provisions for the subsequent impact of Covid-19 in forthcoming reporting contact their supervisor to discuss.