Insurance capital instruments - pre/post-issuance notification (PIN)

Overview

Insurers (UK Solvency II firms and non-Directive firms) must notify us prior to or, where applicable, on the day of issuing or amending most capital instruments that they intend to include in capital resources (non-Directive firms) or own funds (Solvency II firms), either at solo and/or (sub)consolidated level. 

This is in accordance with the following parts of the PRA Rulebook:

• Chapter 5 of SII Firms, Own Funds

• Chapter 6 of SII Firms, Group Supervision

• Chapter 3 of Non-Directive Firms, Insurance Company – Capital Resources.

Firms must notify us by sending us a completed pre-issuance notification (PIN) form.

• Pre issuance notification form for insurance firms (PDF)

Latest updates

15 November 2024: Following PS 15/24 Review of Solvency II: Restatement of assimilated law, previous references to CDR articles in the insurance PIN form have been updated to refer to the relevant rules in the own funds part of the PRA rulebook.

9 June 2020: We updated the insurance PIN form to ask firms submitting a PIN intended to apply to group capital to indicate whether an availability determination will be necessary or not, and to explain why.

When to submit a PIN form

Firms should submit a PIN form before issuing or amending any capital instrument that they intend to include in capital resources or own funds, either at solo, sub-consolidated, group level or any combination of these.

In most cases, firms should submit the form at least one month before the intended date of issue. However, we may be prepared to accept less than one month’s notice in exceptional circumstances that make it impracticable to give one month’s notice. In such circumstances, a firm must submit an explanation on why it believes there are exceptional circumstances that mean we should accept a shorter notice period, along with the PIN form as far in advance of the issuance or amendments as practicable in those circumstances. Firms may also submit a PIN form when the associated capital instrument’s date of issue or amendment is uncertain.

Firms must notify us no later than the day of issuance of their intention to issue or amend a capital instrument (i.e. same-day notification) if the conditions set out in the relevant part of our rules are fulfilled.

• Pre-issuance notification for insurance firms – How far in advance of issuance must notice be given? (PDF)

What to send to us

If you are an insurer you need to send the following information to Insurance.regulatorycapital@bankofengland.co.uk:

1. A completed PIN form for insurance firms

2. A copy of the draft terms and conditions of the intended capital resources or own funds instrument

3. For any item other than ordinary shares, a draft of a properly reasoned independent legal opinion from an appropriately qualified individual confirming that the capital instrument meets the conditions for classification or qualification in the intended tier or stage of capital in accordance with Own Funds 5.2(2)(d) or Group Supervision 6.2(2)(f) (Solvency II firms) or Insurance Companies – Capital Resources 3.2(4) (non-Directive firms)

4. For any item intended for inclusion within restricted T1 capital (for Solvency II firms), a draft of a properly reasoned independent accounting opinion from an appropriately qualified individual identifying the instrument’s treatment in the firm or group member’s financial statements in accordance with Own Funds 5.2(2)(e) or Group Supervision 6.2(2)(g)

Submitting the notification to your PRA supervisory contact does not constitute the required notice. Firms may at their discretion copy their PRA supervisor when submitting the notification. 

Why does the PRA need to be notified?

We need this information to:

• receive consistent data on the quality and quantity of own funds or capital resources issued by all firms

• have advance notice of any proposed action that would result in a change in a particular firm’s capital position and the quality of its capital

• ensure firms have conducted appropriate governance with regard to satisfying themselves that capital items that they intend to count towards satisfying own funds or capital resources requirements meet relevant rules and our expectations regarding capital quality.

Is pre-issuance notification a form of PRA approval?

PIN is not a pre-approval process and we will not provide, nor should we be deemed to be providing, approval (whether explicit or implicit) of any instruments, or confirmation of their eligibility for inclusion in a particular tier of regulatory capital. Insurers will continue to be responsible for ensuring that their instruments comply with all relevant PRA rules and expectations regarding quality of capital.

What happens if the information provided in the notification changes?

If the information provided in the notification changes during the one-month notification period, the firm must provide a further notification to the PRA as soon as it proposes the change, making clear the nature of the amendment(s) or, alternatively, start the notification process anew. Minor amendments (for example, an amendment to the size of issuance or to the issue date) require an amendment to the notification. Where a significant change occurs, (for example, a change in the intended tier of capital or the introduction of new features) firms will need to restart the notification process. If you are unclear about whether to amend or restart notification, please speak with your PRA supervisory contact.

Issuances from entities not regulated by the PRA, which are intended to count as regulatory capital for a UK PRA-regulated group

The notification requirement still applies to capital issuances under these entities. We are aware that a UK firm may not always be aware of plans to issue capital at a group level in a timely manner. Therefore, groups with a UK ultimate parent must notify us as soon as they become aware that a direct or indirect subsidiary of that UK parent (including an overseas subsidiary) that is not regulated by the PRA plans to issue capital that the group will count as regulatory capital at the consolidated level. In addition, where a UK insurance group is a sub-group of a wider non-UK group, pre-issuance notification will only be required for capital issuances intended to count toward group capital requirements at the UK sub-group level.

Key resources

• Pre issuance notification form for insurance firms (PDF)
• Pre-issuance notification for insurance firms – How far in advance of issuance must notice be given? (PDF)