Background
This supervisory statement sets out the PRA’s approach to schemes of arrangement proposed by PRA-authorised insurers under Part 26 of the Companies Act 2006.
In this statement, the PRA:
- provides responses to the feedback received on its consultation on the draft statement in PRA consultation paper 6/13 (the CP) – this statement should be read with that document;
- clarifies its view of schemes of arrangement;
- explains its role in assessing schemes of arrangement and;
- gives supplementary information on interaction with the Financial Conduct Authority (FCA) as well as the PRA’s complementary supervisory statement on capital extractions.
This statement explains some of the factors which the PRA will take into account when judging whether, in promoting a scheme, an insurer is acting in a manner consistent with the PRA’s statutory objectives. Specifically, the PRA seeks to ensure that insurers are able (with a high degree of likelihood) to meet claims from policyholders as they fall due and that where firms wish to exit the market they do so in a way which takes proper account of the need to provide an acceptable degree of continuity of cover for policyholders.
The PRA’s consultation on a draft of this supervisory statement closed on 26 October 2013 and its responses to the feedback on this consultation have been incorporated into the final statement.
Supervisory Statement 3/14