PRA consults on Solvency 2 risk-free rates transition: PRA is consulting on how it should implement the Solvency 2 transitional measures for risk-free rates and technical provisions. It has published for consultation draft rules together with supervisory statements covering PRA's expectations in relation to the transitional measures and on the internal model treatment of participations. PRA asks for comment by 20 February. (Source: PRA Consults on Solvency 2 Risk-Free Rates Transition)

PRA updates on CRR equivalence: PRA has notified firms that the part of its Supervisory Statement SS20/13 on third country equivalence with the credit risk provisions in the Capital Requirements Regulation (CRR) has been deleted with effect from 1 January 2015. Firms should instead refer to the Commission's decisions of 12 December 2014. It also notes that PRA's view as to which recognised exchanges qualify under the CRR will remain current until the Commission adopts its decision on those. (Source: PRA Updates on CRR Equivalence)

PRA explains insurance business transfer policy: PRA is receiving details of several proposed transfers of insurance business in the run-up to Solvency 2. It has many priorities and wanted to tell firms how it proposes to deal with these transfers. It says it will continue to progress transfers where the fee has been paid, the firm has said it plans to complete the transfer in 2015 and the firm is, in fact, on track to do so. Otherwise, it will consider applications on a case-by-case basis. It also says that if it does not have all the relevant documentation six weeks before a directions hearing it may ask for a deferral of the hearing. (Source: PRA Explains Insurance Business Transfer Policy)

PRA speaks on Solvency 2: Paul Fisher spoke on the future of insurance, with specific reference to PRA's role in implementing Solvency 2 into UK law. He said PRA recognises Solvency 2 is a maximum-harmonising Directive and that it cannot and will not gold plate it. He said PRA will continue to be proportionate in its supervision. He said PRA’s role is not to make sure no insurer fails but to ensure any failure is orderly and manageable. He noted that around one third of insurers are in some form of run-off. He then discussed the linkage between capital and risk management and the new governance standards that Solvency 2 introduces. He discussed the Prudent Person Principle as an example of how risk management and strategic decision-making will be owned by the insurer and its management. He looked at the changes to come but challenged the market to view them in a positive light. (Source: PRA Speaks on Solvency 2)