The PRA has issued several Solvency II-related consultations in recent weeks:
- CP31/151 consults on changes to the PRA’s Supervisory Statement2 on third country branches, which was published in March 2015. The proposed revisions include setting out the PRA’s expectation that a third country branch undertakings will comply with the requirements in the branch guidelines of the European Insurance and Occupational Pensions Authority (EIOPA) that are relevant to it and will comply with the rules in the PRA Rulebook that apply to thirdcountry branch undertakings in line with the EIOPA branch guidelines. The consultation paper also sets out details of how the PRA expects third country branch undertakings to report to the PRA where those EIOPA branch guidelines permit the PRA to take a proportionate approach according to the nature, scale and complexity of the branch business.
- CP28/153 is the fourth instalment of the PRA’s proposals for redrafting modules of the handbook which were inherited from the Financial Services Authority to create a standalone handbook containing only PRA rules, i.e. the PRA Rulebook. The draft text that will be of most interest to insurers is the draft Financial Conglomerates Part. This will replace the existing rules in General Prudential (GENPRU) and Senior Management Arrangements, Systems and Controls (SYSC) which apply to firms carrying out activities in both banking/ investment and insurance sectors.
- CP27/154 proposes draft text for new parts of the PRA Rulebook that will apply only to firms which are not subject to Solvency II. The draft parts will replace existing rules in parts of GENPRU, Prudential sourcebook for Insurers (INSPRU), Interim Prudential sourcebook for friendly societies (IPRU (FSOC)), Supervision (SUP) and SYSC. The consultation paper states that the PRA’s aim is not to introduce significant changes to policy but to simplify the rules which apply to non-Solvency II firms.
- CP26/155 contains implementation proposals for the SIMR that will apply to non-Solvency II firms. The consultation supplements Policy Statement 21/156 which sets out the final rules for the regime.
- CP25/157 on reporting and public disclosure seeks feedback on a draft supervisory statement setting out the PRA’s expectations of firms where it has an option to specify a different approach to that published in the Implementing Technical Standards (ITS) for the Solvency II reporting templates and the Solvency II public disclosure templates. The draft supervisory statement sets out the PRA’s expectations where it has options in areas such as Solvency II reporting currency, exchange rates and accident or underwriting year reporting.