First Published on 30 October 2015
This supervisory statement is of interest to all UK insurance firms and groups within the scope of Solvency II, the Society of Lloyd’s and, where applicable, to third country branches. For third country branches it should be read alongside the EIOPA Guidelines, and the Prudential Regulation Authority’s (PRA‘s) Rules and supervisory statement on third country branches (see PS2/15 and SS10/15 in Related Links).
This supervisory statement sets out the PRA’s expectations of firms where the Solvency II supervisory reporting Implementing Technical Standards (ITS) and the Solvency II public disclosure ITS allows supervisory authorities to specify different approaches to the default set out in the standards, or requires supervisory authorities to issue instructions. The supervisory statement sets out the PRA’s expectation of how firms are to comply with the standards when options are provided to supervisory authorities in the following areas:
i. Solvency II reporting currency.
ii. Exchange rates.
iii. Accident or underwriting year reporting.
iv. Claim size brackets for loss distribution risk profile.
v. Sum insured size brackets for non-life distribution of underwriting risks by sum insured.
vi. Lines of business to be reported for non-life distribution of underwriting risks by sum insured.
vii. Reporting of annuities stemming from non-life obligations by currency.
viii. Development of the distribution of reported but not settled (RBNS) claims - reporting number of claims.
ix. Reporting external ratings.
x. Group reporting where the PRA is the group supervisor and there are no consolidated financial statements at the head of the insurance or reinsurance group.
Please note: as at 30 October 2015, the Solvency II supervisory reporting ITS and the Solvency II public disclosure ITS had been published in EIOPA final reports on public consultations 14/052 and 14/055 respectively and were awaiting formal adoption by the European Commission. This supervisory statement will only be updated if there are substantive changes to the ITS on their formal adoption. The PRA consulted on proposals in CP25/15 which was published on 10 August 2015 and closed on 21 September 2015 (see Related Links). The PRA has considered the feedback received and this is reflected in publication SS40/15.