Published on 17 December 2021
PS29/21 – Review of Solvency II: Reporting (Phase 1)
Overview
This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 11/21 ‘Review of Solvency II: Reporting (Phase 1)’ (page 2 of 2). It also contains the PRA’s final rule instrument, UK Technical Standards amendment instrument, Statement of Policy (SoP) and Supervisory Statements (SS), as set out below:
- amendments to the onshored version of the Commission Implementing Regulation (EU) 2015/2450 (PRA Standards Instrument) (Appendix 1);
- amendments to the Minimum Capital Requirement Part of the PRA Rulebook (PRA Rulebook Instrument) (Appendix 2);
- an updated SS11/15 ‘Solvency II: Regulatory Reporting and exemptions’ (Appendix 3);
- an updated SS40/15 ‘Solvency II: reporting and public disclosure options provided to supervisory authorities’ (Appendix 4);
- an updated SS41/15 ‘Solvency II: applying EIOPA Set 2, System of Governance and ORSA Guidelines’ (Appendix 5);
- an updated SS44/15 ‘Solvency II: third-country insurance and pure reinsurance branches’ (Appendix 6); and
- an updated Statement of Policy (SoP) ‘Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU’ (Appendix 7).
This PS is relevant to all UK Solvency II firms, the Society of Lloyd’s and its managing agents, insurance and reinsurance undertakings that have a UK branch (third-country branch undertakings), and firms within the PRA’s Temporary Permissions Regime (TRP) for (re)insurers.
Summary of responses
The PRA received fourteen responses to the CP. Respondents welcomed the PRA’s proposals to remove selected reporting requirements, and expand the application of modification by consent to waive quarterly reporting requirements. However, some respondents also asked for the implementation date be brought forward than proposed in the CP, and suggested a further reduction to the reporting frequency proposed in respect to the MCR templates. A few respondents sought clarifications on the proposal relating to the reporting frequency of the MCR. Although out of the scope of the proposals in the CP, respondents suggested areas of reporting requirements that could be simplified, deleted, or the frequency be reduced to achieve an ambitious reform in the next phase of the review.
Implementation
The policy in the SSs and the SoP as set out in the appendices will take effect upon publication of this PS, on Friday 17 December 2021. The modification by consent will also be made available for firms on the same date.
The PRA Standards Instrument and the PRA Rulebook Instrument will be effective for quarterly and annual reporting reference dates falling on and after Friday 31 December 2021.
The policy in this PS has been designed in the context of the UK having left the European Union and the transition period having come to an end. Unless otherwise stated, any references to EU or EU derived legislation refer to the version of that legislation which forms part of retained EU law.
Policy Statement 29/21 Appendix
Appendix 1: PRA STANDARDS INSTRUMENT: THE TECHNICAL STANDARDS (SOLVENCY II REGULAR SUPERVISORY REPORTING) INSTRUMENT 2021
Appendix 2: PRA RULEBOOK: SOLVENCY II FIRMS: MINIMUM CAPITAL REQUIREMENT INSTRUMENT 2021
Appendix 3: SS11/15 ‘Solvency II: regulatory reporting and limitations’
Appendix 4: SS40/15 ‘Solvency II: reporting and public disclosure options provided to supervisory authorities’
Appendix 5: SS41/15 ‘Solvency II: applying EIOPA Set 2, System of Governance and ORSA Guidelines’
Appendix 6: SS44/15 ‘Solvency II: third-country insurance and pure reinsurance branches’
Appendix 7: Bank of England and PRA Statement of Policy ‘Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU’
Appendix 8: Modification by consent available at Waivers and modification of rules
Published on 8 July 2021
CP11/21 – Review of Solvency II: Reporting (Phase 1)
Update 13 August 2021: In ‘Table 1 reporting templates’ of Appendix 6 (Draft amendments to SS44/15) of this CP, the proposed deletions in respect of templates S.28.01.01 and S.28.02.01 are shown incorrectly under the column heading ‘Quarterly reporting Quarters 1 and 3’, instead of ‘Quarterly reporting Quarters 2 and 4’. The reporting quarters proposed in relation to templates S.28.01 and S.28.02 are the first and third quarters of firms’ financial years, as set out in Chapter 2 of the CP, and paragraph 6.3 in Appendix 6.
Overview
This Consultation Paper (CP) sets out the Prudential Regulation Authority’s (PRA) proposed changes to the Solvency II reporting requirements and expectations. The PRA has developed these proposals in line with HM Treasury’s review of Solvency II, on which HM Treasury sought evidence between Monday 19 October 2020 and Friday 19 February 2021.
The proposals in this CP would result in changes to the following policy material:
- The onshored version of the Commission Implementing Regulation (EU) 2015/2450 Instrument 2021 (Appendix 1)
- Minimum Capital Requirement Part of the PRA Rulebook (Appendix 2)
- Supervisory Statements (SS) (Appendix 3 to 6):
- SS11/15 ‘Solvency II: Regulatory Reporting and exemptions’;
- SS40/15 ‘Solvency II: reporting and public disclosure options provided to supervisory authorities’;
- SS41/15 ‘Solvency II: applying EIOPA Set 2, System of Governance and ORSA Guidelines’; and
- SS44/15 ‘Solvency II: third-country insurance and pure reinsurance branches’.
- Statement of Policy (SoP) ‘Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU’ (Appendix 7)
The CP is relevant to all UK Solvency II firms, the Society of Lloyd’s and its managing agents, insurance and reinsurance undertakings that have a UK branch (third-country branch undertakings), and firms within the PRA’s Temporary Permissions Regime for (re)insurers.
Implementation
The PRA proposes that the implementation date for the proposals set out in this CP would be for quarterly and annual reporting reference dates falling on and after Thursday 31 March 2022.
Responses and next steps
This consultation closes on Friday 8 October 2021. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP11_21@bankofengland.co.uk.
The proposals in this CP have been designed in the context of the UK having now left the EU and the transition period having come to an end. Unless otherwise stated, any references to EU or EU derived legislation refer to the version of that legislation which forms part of retained EU law.
These proposals should be read in conjunction with SS1/19 ‘Non-binding PRA materials: The PRA’s approach after the UK’s withdrawal from the EU’, SS2/19, and the SoP ‘Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU’. Firms within the PRA’s Temporary Permission Regimes for (re)insurers should read the proposals alongside the transitional relief that the PRA has granted as the end of the transition period.