One method by which the FSA regulates run-off companies is by requiring the submission of an Individual Capital Assessment (ICA) when the company enters run-off or goes through a material change (such as a sale, Part VII transfer etc). The ICA requires a firm to assess the risks faced by the business and quantify the capital needed to mitigate that risk.
The Association of Run-Off Companies (ARC) and some of its actuarial members have been investigating creating a template ICA model which would be FSA approved. It would be available at a reasonable cost and could be simply tailored depending on the nature of the company's business, rather than each company having to create a new model from scratch. An "in principle" commitment has been agreed with ARC member actuaries to enter into a tender process, following which ARC would select one actuary to help build the model. ARC is currently canvassing its members to gauge their level of interest in such a product.