12 December 2013

PRA/Adams: Solvency II - A turning point

Speaking as the PRA set out how it would apply the preparatory measures from January 1 2014, Julian Adams, deputy head of the authority, said insurers would not be required to go beyond the guidelines set out by the EIOPA. Adams also emphasised that in implementing Solvency II's rules into the regulatory handbook, the PRA would follow the Directive text "as closely as possible".

Adams also stressed it was important that insurers kept up-to-date with developments in delegated acts, implementing technical standards and guidance that will be issued by the European Commission and Eiopa.

On the preparatory measures for Solvency II, Adams emphasised that current regulatory rules, such as Solvency I and Individual Capital Assessment (ICA), would continue to apply. "The current supervisory regime does not go away. Firms will need to continue to meet existing regulatory requirements until Solvency II is implemented", he said.

The PRA would, however, look for ways to ease any extra burden on firms. "We recognise there are elements of the guidelines that will require significant effort and resource. Where possible, and as we did for ICAS+, we will look for ways firms may be able to use their preparations for Solvency II to meet the current requirements."

Adams added: "As many of the guidelines represent good practice in conformity with existing UK rules, they should not present an additional burden for many firms".

The preparatory guidelines developed by EIOPA are aimed at supporting national regulators and insurers in their preparation for Solvency II and include measures relating to systems of governance, forward-looking assessment of an insurer's own risks, and the submission of information to national regulators.

Full speech

PRA-Supervisory Statement | SS4/13 Solvency II: applying EIOPA's preparatory guidelines to PRA-authorised firms

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