This month's roundup of developments affecting the insurance industry sees the PRA publish final rules on the Senior Insurance Managers Regime for non-Solvency II firms; the PRA question insurers on their own cyber-resilience capabilities and the European Commission adopt delegated regulation on risk concentration and intra-group transactions.

General Update 

  • Insurers given HMRC IPT relaxation to ease implementation
  • Workshop on compensation practices in the insurance sector
  • Lloyd's revised guidance on sanctions clauses

Data Protection 

  • Insurers using subject access requests to see medical information
  • Committee of MP's to scrutinise big data opportunities and risks
  • UK regulator updates guidance on section 29 Data Protection Act

New Legislation and Consultations 

  • Insurance Europe responds to EC consultation on EMIR
  • Insurance Europe response to PRIIPs technical discussion paper
  • PRA consults on prudential regime for non-Solvency II insurance firms

Regulatory Developments

  • EC adopts Delegated Regulation on RTS on risk concentration and intra-group transactions under FICOD
  • PRA intra-group reinsurance of MA business
  • PRA final rules on streamlined SIMR for non-Solvency II firms
  • PRA and FCA issue further consultation papers on individual accountability framework for non-Solvency II firms
  • PRA publishes questionnaire sent to insurers on cyber-resilience capabilities

Solvency II

  • Insurance Europe raises concerns about Solvency II implementation
  • EIOPA consultation responses on infrastructure investment risk categories
  • EIOPA provides update on Solvency II reporting formats
  • Solvency II data point model and XBRL taxonomy design update from EIOPA
  • EIOPA publishes draft ITS on supervisory approval processes for Solvency II
  • EIOPA launches website for XBRL reporting under Solvency II
  • PRA Solvency II supervisory statements (life insurance product reporting codes and internal model reporting codes and components)
  • FCA and PRA final rules on strengthening individual accountability in Solvency II insurers
  • PRA consultation on Solvency II reporting and public disclosure options provided for supervisory authorities

General Update

Insurers given HMRC IPT relaxation to ease implementation

Following representation by the Association of British Insurers, insurers who are preparing for the introduction of the new, higher rate of Insurance Premium Tax (IPT) are to be given a temporary relaxation in how they file IPT returns to HMRC. ABI, 7 August 2015

Workshop on compensation practices in the insurance sector

The Financial Stability Board has published a note of its first workshop on compensation practices in the insurance sector, held jointly with the International Association of Insurance Supervisors. The aim of the workshop, which follows from a similar workshop held with banks, was to consider remuneration practices at insurers. Participants pointed out the differences between banks and insurance companies, noting that insurers and their employees take more of a long term view. Financial Stability Board, 3 August 2015

Lloyd's revised guidance on sanctions clauses

The Society of Lloyd's has published market bulletin (Y4916) which outlines its general position regarding the use and function of sanctions clauses in insurance and reinsurance contracts. The Society of Lloyds, 27 July 2015

Data Protection

Insurers using subject access requests to see medical information

The Information Commissioner has recently been considering the practice whereby insurance companies use patients' subject access rights to obtain medical records.

The Access to Medical Reports Act 1988 established a clear, legal route for insurance companies to access medical information, allowing a GP, with their patient's permission, to provide a tailored report to an insurer setting out the information needed. More recently, some insurance companies have instead looked to rely on the subject access right of consumers under the Data Protection Act 1998 to gain full medical records rather than a GP's report.

The ICO is concerned that the processing of medical records by insurers is likely to breach the Data Protection Act, and has notified the insurance industry that this use of subject access rights is inappropriate and an abuse of the right. Furthermore, the ICO has advised that patients are still able to make subject access requests to their GP, and suggests that GP's should explain the implications of making subject access requests to patients, so that they are capable of making a more informed decision on exercising their Data Protection rights.

GP's have been further advised that they must continue to respond to subject access requests in accordance with the guidance published on the ICO website, and should share responses with patients rather than insurance companies. To read the ICO guidance click here

Committee of MP's to scrutinise big data opportunities and risks

The UK Science and Technology Committee is considering opportunities in big data for entrepreneurs to ensure that they can make the most of the increasing availability of data and analytics software.

Big data refers to sets of large and complex data which can be used to create business intelligence.

The inquiry will look at whether the Government is going enough to ensure that UK entrepreneurs can benefit from the data revolution but also ensure that consumers feel their private data is protected.

To read more about the inquiry, please click here.

UK regulator updates guidance on section 29 Data Protection Act

New guidance has been issued by the Information Commissioner's Office (ICO) on applying the exemption for use of personal data for purposes connected to either taxation or crime. Data controllers who process data for the purposes of taxation or crime can use the exemption to withhold information that would otherwise need to be provided to individuals. The exemption also allows data controllers to disclose personal data in ways that would usually breach the data protection principles, if it is necessary for reason of taxation or crime. To read ICO guidance click here

New Legislation and Consultations

Insurance Europe response to PRIIPs technical discussion paper

Insurance Europe has expressed a number of concerns in its response to the European Supervisory Authorities’ (ESAs) technical discussion paper on packaged retail and insurance-based investment products (PRIIPs). Insurance Europe, 18 August 2015

Insurance Europe responds to EC consultation on EMIR

Insurance Europe has provided a response to a European Commission consultation on the review of the European Market Infrastructure Regulation (EMIR). Insurance Europe, 17 August 2015

PRA consults on prudential regime for non-Solvency II insurance firms

The PRA has published a consultation paper on the prudential regime for insurance firms that are not subject to the Solvency II Directive (2009/138/EC) (CP27/15). 13 August 2015

Regulatory Developments

EC adopts Delegated Regulation on RTS on risk concentration and intra-group transactions under FICOD

The European Commission has published the Delegated Regulation it has adopted on regulatory technical standards (RTS) specifying the definitions and coordinating the supplementary supervision of risk concentration and intra-group transactions. European Commission, 21 August 2015

PRA intra-group reinsurance of MA business

The PRA has issued a document which provides clarification for intra-group reinsurance of matching adjustment (MA) business. Bank of England: PRA, August 2015

PRA final rules on streamlined SIMR for non-Solvency II firms

The PRA has published a policy statement (PS21/15) containing its final rules to implement the proposals made in Consultation Paper 12/15 in relation to the streamlined approach taken to the Senior Insurance Managers Regime (SIMR) for firms that are not subject to the Solvency II Directive (2009/138/EC). EIOPA, 13 August 2015

PRA and FCA issue further consultation papers on individual accountability framework for non-Solvency II firms

The PRA and FCA have published further consultation papers for insurance firms not subject to the Solvency II Directive (2009/138/EC):

  • On the PRA's senior insurance managers regime PRA CP26/15
  • And on changes to the FCA's approved persons regime FCA CP15/25 PRA / FCA 13 August 2015

PRA publishes questionnaire sent to insurers on cyber-resilience capabilities

The PRA has sent a questionnaire to insurance firms on cyber-resilience capabilities. Bank of England: PRA, 12 August 2015

Solvency II

Insurance Europe raises concerns about Solvency II implementation

Insurance Europe has said that many insurers are concerned about the pressure they face due to last minute requirements being imposed in the run up to the Solvency II regime coming into force. Insurance Europe, 24 August 2015

EIOPA consultation responses on infrastructure investment risk categories

The European Insurance and Occupational Pensions Authority has published the responses it has received to its consultation on the call for advice from the European Commission on the identification and calibration of infrastructure investment risk categories under the Solvency II Directive. EIOPA, 18 August 2015

EIOPA provides update on Solvency II reporting formats

The European Insurance and Occupational Pensions Authority has updated its Solvency II Directive reporting webpage with information on the data point model (DPM), XBRL taxonomy and validation rules. EIOPA, 24 August 2015

Solvency II data point model and XBRL taxonomy design update from EIOPA

The European Insurance and Occupational Pensions Authority has revised its Solvency II Directive reporting webpage with information on the Data Point Model (DPM) and XBRL taxonomy design. EIOPA, 31 July 2015

EIOPA publishes draft ITS on supervisory approval processes for Solvency II

The European Insurance and Occupational Pensions Authority has published versions of its draft implementing technical standards (ITS) required by the Solvency II Directive in relation to templates on the supervisory approval process. EIOPA, 11 August 2015

EIOPA launches website for XBRL reporting under Solvency II

The European Insurance and Occupational Pensions Authority has launched a website to present and explain its "Tool for Undertakings" (T4U) project, which relates to XBRL reporting under the Solvency II Directive. EIOPA, 10 August 2015

PRA Solvency II supervisory statements (life insurance product reporting codes and internal model reporting codes and components)

The PRA has published two supervisory statements relating to the Solvency II Directive. They are:

  • Solvency II: life insurance product reporting codes ( SS36/15).
  • Solvency II: internal model reporting codes and components ( SS37/15). Bank of England: PRA, August 2015

FCA and PRA final rules on strengthening individual accountability in Solvency II insurers

The FCA and PRA have published policy statements containing their respective final accountability rules for individuals working in insurance firms that are subject to the Solvency II Directive (2009/138/EC)

  • The PRA has published a policy statement on strengthening accountability in insurance (PS22/15)
  • and the FCA has published a policy statement on changes to its approved persons regime for Solvency II firms (PS15/21). PRA / FCA 13 August 2015

PRA consultation on Solvency II reporting and public disclosure options provided for supervisory authorities

The PRA has issued a consultation paper (CP25/15) on the options provided to supervisory authorities in relation to reporting and public disclosure requirements under the Solvency II Directive. The consultation runs until 21 September 2015. Bank of England: PRA, August 2015