PRA is consulting on a policy requiring external audit of elements of Pillar 3 disclosure under Solvency 2. Under Pillar 3, Solvency 2 firms must disclose publicly a Solvency and Financial Condition Report (SFCR). The proposed policy would require external audit of quantitative and qualitative information included in the “Valuation for solvency purposes” and “Capital management” sections of the SFCR of insurers prepared at the solo, group and sub-group level. Where production of an SFCR is required, PRA proposes to require these elements to be externally audited, subject to two exemptions. The solvency capital requirement would be exempt if calculated using an approved full or partial internal model and, where this information is to be produced using sectoral rules, that information would not be subject to external audit. PRA intends to give SFCR users greater confidence in the quality of disclosures. Consultation closes on 19 February 2016. (Source: PRA CP43/15 – Solvency 2 Auditing)