PRA has launched two consultations relating to the Solvency 2 regime. The first covers consolidation of Directors’ letters and sets out PRA’s proposals for streamlining the presentation of the ways in which it expects firms to meet various requirements of Solvency 2. The consultation sets out new draft and updated supervisory statements explaining PRA’s expectations of firms that published Directors’ letters in the period 1 April 2013 to 15 February 2016. This paper consolidates existing guidance but does not propose any new rules or guidance not previously consulted on. The second consultation deals with changes to internal models used by UK insurance firms. It sets out PRA’s expectations on firms and the Society of Lloyd’s in relation to these changes and on extensions to the scope of internal models that have been approved under Solvency 2. The proposals describe PRA’s expectations for:
- before and during a model change application;
- the quality of firms’ model change applications; and
- the information PRA expects to be provided with a model change application.
Again, PRA proposes to explain these expectations in a supervisory statement. The consultations close on 5 August. (Sources: PRA consultation on Solvency 2 Directors’ letters and PRA consultation on Solvency 2 internal models)