BoE Executive Director of Insurance Supervision, Sam Woods, has spoken to the Association of British Insurers about what is in store for those affected by Solvency 2 and offered some reflections on the new regime. He said PRA is reviewing around 200 Solvency 2 applications, of which around 20 are from firms wanting approval for internal models. He highlighted how important it is for the current application reviewing process to be carried out fairly and consistently, as well as the need for firms who obtain model approval to remain fit for purpose on an on-going basis. He noted that many of the current regime’s principles will continue under Solvency 2 but the introduction of the risk margin is new and, in his view, Solvency 2 is not clear as to its role. He ended by talking about what “normal” will look like under Solvency 2, which will set the bar at something broadly equivalent to a BBB rating. He stressed that Solvency 2 does not require regulators to place an extra bar on top of this, although firms may of course choose to hold an additional buffer. (Source: BoE Woods – Solvency 2: Approaching the Try Line)