PRA consults on subordinated guarantees for insurers: PRA is consulting on a draft supervisory statement setting out how insurers can act as guarantor on subordinated guarantees in connection with capital instruments issued by companies. The consultation is aimed at life insurers, general insurers and mutuals within the scope of Solvency 2. It stresses that:

  • subordinated guarantees should not undermine the quality of capital held by firms to meet capital requirements; and
  • the guarantor’s regulatory capital position should be reported if the guarantee creates a liability that undermines the guarantor’s quality of capital.

It notes the statement is relevant not only to all firms but also potentially to insurance holding companies and other entities in the same group. PRA wants comments by 11 July. (Source: PRA Consults on Subordinated Guarantees for Insurers)

PRA consults on valuation risk for insurers: PRA is consulting on a draft supervisory statement setting out its expectations on insurers in respect of valuation risk. The statement does not represent any change in policy. It confirms the requirements in the General Prudential Sourcebook (GENPRU) and notes the statement applies to general and life insurers and potentially their group companies and advisers. PRA asks for comments by 11 July. (Source: PRA Consults on Valuation Risk for Insurers)

PRA issues INSPRU modification: PRA has published a modification by consent of a rule in the Prudential Sourcebook for Insurers (INSPRU). The modification renews an existing modification to INSPRU 2.1.22R in respect of counterparty exposure limits on overseas business. The new modification will last until 2016. Firms wishing to benefit from it should submit a request to PRA. (Source: PRA Issues INSPRU Modification)