Cross cutting publications and updates
PS4/24 – PRA statement on the review of rules
22 February 2024
This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses to the consultation paper (CP) 11/23 – PRA statement on the review of rules. This PS also contains the PRA’s final statement on the review of rules, which the PRA is required to publish under section 3RB of the Financial Services and Markets Act 2000 (FSMA).
The feedback to the responses to CP11/23 in this PS is relevant to any firm that is or may be subject of a PRA rule, which includes all PRA-authorised persons – banks, building societies, credit unions, insurers and designated investment firms – as well as other persons that are subject to PRA rules such as the parent entities of these.
PS4/24 – PRA statement on the review of rules
Insurance publications and updates
PS3/24 – Review of Solvency II: Reporting and disclosure phase 2 near-final
29 February 2024
This PRA final PS provides feedback to responses to CP 14/22 – Review of Solvency II: Reporting phase 2 as well as Chapter 7: Reporting and disclosure in CP12/23 – Review of Solvency II: Adapting to the UK insurance market. This PS sets out the PRA’s final reporting and disclosure policy, and should be read in conjunction with PS2/24 – Review of Solvency II: Adapting to the UK insurance market, which sets out the PRA’s final policy on other elements of Solvency UK policy. The rule instruments and policy material under both these PS’s however is near-final, as explained in paragraph 1.35. This PS contains the following near final rules and near-final policy material:
- amendments to the following parts of the PRA Rulebook (Appendix 1):
- External Audit Part of the PRA Rulebook;
- Fees Part of the PRA Rulebook; and
- Reporting Part of the PRA Rulebook;
- amendment and transfer to the Reporting Part of the PRA Rulebook of those reporting and disclosure templates and instruction files that are to be retained as part of Solvency UK and are currently contained in onshored Commission Implementing Regulation (EU) 2015/2450 (ITS 2015/2450), the onshored Commission Implementing Regulation (EU) 2015/2452 (ITS 2015/2452) and the European Insurance and Occupational Pensions Authority (EIOPA) Third Country Branch Guidelines (Appendix 2);
- update to the third country branch guidelines (Appendix 3);
- update to the following supervisory statements (Appendix 4):
- SS11/16 – Solvency II: External audit of, and responsibilities of, the governing body in relation to the public disclosure requirement;
- SS25/15 – Solvency II: Regulatory reporting, internal model outputs;
- SS40/15 – Solvency II: reporting and public disclosure options provided to supervisory authorities;
- SS44/15 – Solvency II: third-country insurance and pure reinsurance branches;
- SS7/17 – Solvency II: Data collection of market risk sensitivities; and
- SS17/16 – Solvency II: internal models – assessment, model change and the role of non-executive directors;
- deletion of the following supervisory statements:
- SS36/15 – Solvency II: life insurance product reporting codes;
- SS6/18 – National Specific Templates LOG files; and
- SS11/15 – Solvency II: Regulatory Reporting and exemptions;
- the introduction of a new statement of policy on reporting waivers (Appendix 4).
This PS contains the PRA’s final policy in the form of near final rules and updated near final policy materials. Please see Appendices 1 to 7 for the materials that have been amended, introduced, or deleted as part of the final policy in this PS. As explained later in paragraph 1.35, while this PS contains the PRA’s final policy, the related rules and policy materials are considered near final due to the potential for further changes resulting from the PRA’s phased plan for consulting on Solvency II reforms and the transfer of the remaining firm-facing Solvency II requirements from assimilated law into the PRA rulebook and other policy materials. The PRA expects such changes are likely to be limited.
This PS is relevant to UK Solvency II firms, the Society of Lloyd’s and its members and managing agents, insurance and reinsurance undertakings that have a UK branch (third-country branch undertakings), and firms and UK holding companies required to publicly disclose or report group information to the PRA.
PS3/24 – Review of Solvency II: Reporting and disclosure phase 2 near-final
Statement of policy – Solvency II regulatory reporting waivers
29 February 2024
This statement of policy (SoP) sets out the PRA’s approach to waiving Solvency UK regulatory reporting requirements. The statement is addressed to all Solvency UK firms and to Lloyd’s, and should be read alongside all relevant EU legislation, and the Reporting Part of the PRA Rulebook.
Solvency II regulatory reporting waivers
PS2/24 – Review of Solvency II: Adapting to the UK insurance market
28 February 2024
In June 2023, the PRA published the CP12/23 – Review of Solvency II: Adapting to the UK insurance market. This marked an important milestone towards adapting the Solvency II framework to the UK market. The CP set out the PRA’s proposals to deliver significant reforms for Solvency II, designed to support a more competitive and dynamic sector in the UK, while maintaining high standards of policyholder protection.
This PRA PS provides the PRA’s feedback to responses received to the following chapters of CP12/23:
- Chapter 1 – Overview
- Chapter 2 – Transitional measures on technical provisions (TMTP) and the risk-free interest rate
- Chapter 3 – Internal Models
- Chapter 4 – Capital Add-Ons
- Chapter 5 – Flexibility in calculating the Group SCR
- Chapter 6 – Third-country branches
- Chapter 8 – Mobilisation
- Chapter 9 – Thresholds
- Chapter 10 – Currency redenomination
This PS also contains the PRA’s final policy in the form of near-final rules and updated near-final policy materials, including supervisory statements (SSs) and SoPs. Appendix 1 of the PS contains a full list of the materials that have been amended, introduced, or deleted as part of the final policy in this PS.
While this PS contains the PRA’s final policy in relation to the proposed reforms in CP12/23, the related rules and policy materials are considered near-final due to the potential for further changes resulting from the PRA’s phased plan for consulting on Solvency II reforms and the transfer of the remaining firm-facing Solvency II requirements from assimilated law (previously known as retained EU law) into the PRA Rulebook and other policy materials (the PRA policy framework). The PRA expects such changes are likely to be limited to minor amendments only, to ensure that all the PRA rules and policy across the relevant CPs for the review of Solvency II are aligned and operate coherently with each other, and relevant legislation, as explained in paragraph 1.35 to 1.40. The near-final rules and policy materials in this PS will be finalised as part of the transfer of the remaining firm-facing Solvency II requirements into the PRA policy framework later this year. However, this transfer process will make no further policy changes in relation to the reforms set out in this PS.
The PRA’s feedback to responses received to Chapter 7 (Reporting and disclosure) of CP12/23 is not included in this PS. To provide a holistic view of the remaining reforms to Solvency II reporting and disclosure requirements, the PRA’s feedback to responses received to both Chapter 7 of CP12/23 and CP14/22 – Review of Solvency II: Reporting phase 2 will be set out together, in a separate PS.
The PRA’s feedback to responses received to Chapter 11 (Administrative amendments to PRA rules) of CP12/23 has been set out separately in PS19/23 – Responses to proposed minor amendments in CP8/23, Chapter 11 of CP12/23 and CP22/23, which was published in December 2023. These proposed minor amendments were consequential to HM Treasury’s (HMT) reforms to the Solvency II risk margin, which are now in force.
This PS is relevant to UK Solvency II firms, the Society of Lloyd’s and its members and managing agents, insurance and reinsurance undertakings that have a UK branch (third-country branch undertakings), and UK holding companies. This PS will refer to these collectively as ‘insurers’ or ‘firms’ unless otherwise specified.
The PS will also be of interest to non-Directive firms and anyone intending to provide insurance services operating in, or providing services into, the UK, in so far as the proposals relate to the thresholds for Solvency II to apply and a new mobilisation regime for prospective insurers intending to enter the UK insurance sector.
PS2/24 – Review of Solvency II: Adapting to the UK insurance market
SS1/24 – Expectations for meeting the PRA’s internal model requirements for insurers under Solvency II
28 February 2024
This SS sets out the PRA’s expectations for insurers to meet the PRA’s internal model requirements which arise from Solvency Capital Requirement – Internal Models 10 to 16A.
This SS is relevant to all UK Solvency II firms, the Society of Lloyd’s, its members and managing agents. It is most relevant to firms that have permission to calculate their Solvency Capital Requirement (SCR) using an IM. It may also be of interest to UK Solvency II firms seeking permission to use an IM and to UK Solvency II firms that are part of the European Economic Area (EEA) or non-EEA groups with a group IM.
This SS should be read in conjunction with the Solvency Capital Requirement – Internal Models Part of the PRA Rulebook.
Statement of policy – Solvency II: Capital add-ons
28 February 2024
This SoP sets out the approach that the PRA expects to use in relation to capital add-ons (CAOs).
This SoP is relevant to all UK Solvency II firms, the Society of Lloyd’s, its members and managing agents, herein referred to collectively as ‘firms’. This SoP is also relevant to all UK holding companies.
This SoP should be read in conjunction with the Solvency II internal models: Permissions and ongoing monitoring SoP, and the and Group Supervision Parts of the PRA Rulebook.
Statement of policy – Permissions for transitional measures on technical provisions and risk-free interest rates
28 February 2024
This SoP sets out the PRA’s approach to granting regulatory permissions in relation to the transitional measure on technical provisions (TMTP) and the transitional measure on the risk-free interest rate (TMIR).
The SoP should be of interest to all UK Solvency II firms, and the Society of Lloyd’s, and its members and managing agents, referred to collectively as ‘firms’. It is particularly relevant to firms with permission to apply the TMTP and TMIR, or those that may be acquiring business that benefits from TMTP.
Permissions for transitional measures on technical provisions and risk-free interest rates
Statement of policy – The PRA’s approach to insurance group supervision
28 February 2024
This SoP sets out the PRA’s approach to certain aspects of insurance group supervision under the Group Supervision Part of the PRA Rulebook.
This SoP is relevant to UK Solvency II firms within the scope of the Group Supervision Part of the PRA Rulebook and to the Society of Lloyd’s, its members and managing agents, and insurance holding companies and mixed financial holding companies within the scope of the Group Supervision Part.
The PRA’s approach to insurance group supervision
Statement of policy – Solvency II internal models: Permissions and ongoing monitoring
28 February 2024
This SoP sets out the PRA’s approach to considering applications and granting permissions for the use of internal models (IMs) for the purpose of calculating the Solvency Capital Requirement (SCR).
This SoP is most relevant to firms that have permission to use an IM to calculate their SCR. It will also be of interest to UK Solvency II firms seeking permission to use an IM and to UK Solvency II firms that are part of groups within the European Economic Area (EEA) or non-EEA groups with a group IM.
Solvency II internal models: Permissions and ongoing monitoring
Banking publications and updates
Bank of England Banking Taxonomy v3.8.0 Public Working Draft
5 February 2024
On 5 February 2024 the PRA published the Bank of England Banking Taxonomy v3.8.0 Public Working Draft (PWD), setting out the technical implementation of the proposals outlined in CP23/23.
Feedback is requested by Friday 15 March 2024.
More information
Bank Underground – a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England or its policy committees.
Bank Overground – the purpose of Bank Overground is to share our internal analysis. Each bite-size post summarises a piece of analysis that support a policy or operational decision.
Explainers – from interest rates and inflation through to bank failures and financial crises, Explainers uses everyday examples and engaging visuals to bring economics to life.
European and International developments – readers are referred to the following websites:
