Update 23 July 2015
SS22/15: Solvency II: applying EIOPA’s set 1 guidelines to PRA-authorised firms has been amended to reflect, where relevant, that it applies to Lloyd’s, including Lloyd’s managing agents, rather than just the Society of Lloyd’s. This update does not change the PRA’s expectation of firms set out in the original statement, published 22 April 2015.
Supervisory Statement 22/15 - July 2015
Published on 22 April 2015
Background
The European Insurance and Occupational Pensions Authority (EIOPA) published the Solvency II Set 1 Guidelines on 2 February 2015. Subsequently, on 19 February 2015, the PRA published consultation paper 5/15 - Solvency II: applying EIOPA’s Set 1 Guidelines to PRA-authorised firms. The consultation paper (CP) proposed the PRA’s intention to comply with all the Set 1 Guidelines and included a draft supervisory statement which set out the PRA’s expectations of firms in relation to the EIOPA Set 1 Guidelines.
The CP asked firms to comply with all of the Set 1 Guidelines that apply to them in a proportionate manner in accordance with the principles set out in the Solvency II Directive. It also provided commentary on Guidelines covering: ancillary own-funds; classification of own-funds; ring-fenced funds; treatment of related undertakings, including participations; loss-absorbing capacity of technical provisions and deferred taxes; and group solvency calculation.
The CP was relevant to all UK firms within the scope of Solvency II and to the Society of Lloyd’s.
Summary of the content of the Supervisory Statement
Following consultation, the PRA has taken into account feedback and has published SS22/15 -Solvency II: applying EIOPA’s Set 1 Guidelines to PRA-authorised firms.
In addition, respondents to the consultation raised a number of broader issues. The PRA is considering whether these issues would result in changes to existing supervisory statements.