PRA consults on with-profits business: PRA is consulting on its approach to with-profits insurance business. The consultation clarifies PRA's role and proposes changes to its rules in relation to firms that write with-profits business, and also includes a draft supervisory statement. The proposals take into account recent legislative and supervisory changes, including Solvency 2. PRA wants to delete all existing PRA-designated provisions from COBS 20 and replace them with three new rules relevant to the prudential regulation of UK with-profits insurance business. The new rules will cover:
- assets in the with-profits fund;
- distribution strategies that are affordable and sustainable from a prudential perspective; and
- the structure, terms and conditions of support arrangements.
PRA hopes to achieve fewer rules with a sharper focus for insurers that carry on with-profits business.
It asks for comment by 15 January 2015. (Source: PRA Consults on With-Profits Business)
PRA consults on Solvency 2 approvals: PRA is consulting on its expectations and guidance for firms in relation to approvals the firms might seek under Solvency 2. The consultation covers:
- internal model approvals;
- Solvency 2 approvals which Solvency 2 Level 2 legislation detail legal requirements including the matching adjustment (MA), ancillary own funds and undertaking specific parameters;
- other approvals including: exclusion of an entity from the scope of group supervision; single group own risk and solvency assessment; and solvency and financial condition report dispensation; and
- the calculation method for the group solvency capital requirement.
The paper also sets out the pre-application process for the MA which PRA will use to assess whether the firm is likely to meet the necessary conditions. It asks firms to tell their supervisors if they plan to participate by the end of November and then make the submissions between 1 December 2014 and 6 January 2015. The consultation closes on 9 January 2015. (Source: PRA Consults on Solvency 2 Approvals)