On Wednesday 21 January, the Prudential Regulatory Authority (“PRA”) published a letter explaining how it intends to deal with insurance transfers under Part VII of the Financial Services and Markets Act 2000 during the course of 2015. The existing volume of transfers together with the resources needed to deal with the implementation of Solvency II means that the PRA is looking closely at how it manages its own resources and managing the expectations of insurers considering insurance business transfers with a 2015 effective date.
Transfers where the fee has been paid (or a special project fee has been agreed) or where a transfer is already on track to complete in 2015 will progress as normal. The timetable for new insurance transfers will need to be agreed with the PRA. It will assess new timetables in light of the impact on its objectives and the likelihood of the transfer completing by the end of 2015. Insurers who are planning an insurance business transfer with the aim of achieving a 2015 effective date will need to give careful consideration to the timetable. The PRA’s letter emphasises the need for timetables for transfers to be “credible and realistic”. The PRA also makes it clear that it will not review any draft documents until all documents, including the Independent Expert’s report, are in final draft form.