The Prudential Regulation Authority (PRA) in the UK has recently published a number of documents and updates relating to Solvency II. On 22 May 2013, the PRA updated its website to provide information regarding certain tools it has developed for use in the internal model approval process for the purpose of Solvency II. On 23 May 2013, the PRA published a letter confirming that it plans to utilise 'Early Warning Indicators (EWIs)' (which will differ for life (excluding with-profits), non-life and with-profits business) to effectively monitor the suitability of approved internal models under the Solvency II regime. The PRA states that it will test the indicators in the period prior to formal implementation of Solvency II. The PRA also confirms that EIOPA is itself considering the use of such indicators for approved internal models. On the same day, the PRA published a letter which outlined its approach to the implementation of Solvency II. It noted that, due to the delay at EU level, it had 'rephased and scaled back' its activities in this regard. A key emphasis in the letter is the importance of non-modelled cross checks, and the PRA points to its plans for EWIs in order to achieve this. Finally, the PRA confirms that it will shortly contact a number of life and non-life insurers with data requests, including in relation to capital requirements and risk information.
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PRA publications and updates regarding Solvency II
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