4

The approval process

4.1

The PRA asks firms to notify their usual supervisory contacts at the earliest opportunity if they intend to make an application.

4.2

The PRA will determine all applications for VA approval within a period of 6 months from the date that a complete application is received. Having regard to its desire to run an efficient and effective approval process, the PRA will endeavour to make decisions within a shorter timeframe than this where possible. In particular, for applications to use the VA that are not dependent on other approval decisions such as internal model applications, the PRA will endeavour to make decisions within 6 weeks from receipt of a complete application.

4.3

In accordance with Regulation 55(1) of the Statutory Instrument, the PRA will issue firms with a written notice communicating the outcome of the application.

4.4

Firms are encouraged to include a completed checklist with their applications, as provided separately on the Bank of England website. While use of the checklist is not mandatory, it will help to ensure that firms have submitted the necessary information for the PRA to consider the application and avoid delays that may result from incomplete applications.

Interaction with other Solvency II approvals and contingency planning

4.5

The PRA recognises that there may be dependencies between a firm’s Solvency II approval applications. For example, a firm may wish to use the matching adjustment (MA) for some of its business, but to use the VA as a contingency option for those parts of that business, if any, where the MA application is rejected. In this case, the PRA will consider MA and VA applications in parallel, if requested to do so by a firm.

4.6

Where a parallel review is requested, firms must make clear in their applications which is the preferred measure, and which is the alternative measure in the event that the preferred measure is not approved. A complete application must be submitted for each of the measures. If undertaking a parallel review, the PRA will endeavour to schedule its review work and decision panels so as to reach a ‘joint decision’ on the two approvals concurrently and communicate this simultaneously.

4.7

When submitting an application for the VA, firms should inform the PRA of any other approvals for which they have applied. The PRA also encourages firms to also give details of any other approvals for which they intend to apply during the next 12 months.