PRA publishes SSPs for insurers: PRA has published its statements of supervisory policy (SSPs) on:
- subordinated guarantees and use of capital. This statement sets out PRA’s expectations of insurers and related firms in relation to: the use of subordinated guarantees in connection with capital instruments issued by a company, whereby the payment of coupons and repayment of principal are guaranteed by a firm (the guarantor); how subordinated guarantees should not undermine the quality of capital held by firms to meet capital requirements; and how the guarantor’s regulatory capital position should be reported if the liability created by the guarantee serves to undermine the guarantor’s quality of capital. The SSP related to the connected transaction rules in the General Prudential Sourcebook (GENPRU) and will from 1 January 2016 relate to the PRA rule transposing Article 93 of Solvency 2; and
- valuation risks for insurers: this statement merely clarifies PRA's expectations and does not represent a change of policy.
PRA writes to credit unions: PRA has written to credit unions with the findings of its annual assessment of the sector. The credit unions not meeting minimum capital requirements have been required to prove they have a viable plan to meet those requirements on an ongoing basis, failing which PRA will take action to close them. They should therefore ensure they have a Single Customer View file and be ready to avoid a disorderly failure. PRA would not allow mergers or the release of subordinated debt that could spread contagion to other credit unions. Directors should keep PRA informed of any proposals. (Source: PRA Annual Assessment of the Credit Union Sector)