Solvency II Review – considerations for year-end 2023
This article was first published in December 2023. The PRA has published the Solvency II Review – considerations for year-end 2023 on 8 December 2023.
The statement provides details on PRA’s adjustments to regulatory reporting requirements and the transitional measure on technical provisions, with a focus on facilitating the risk margin calculation in accordance with HMT’s regulations.
The Regular Supervisory Reports (RSRs) are no longer required from 31 December 2023. This exclusion is for both the full triennial report and the annual summary of material changes.
Additionally, the following forms do not need to be reported between 31 December 2023 and 30 December 2024, with the final decision on whether they will be deleted to be made by 31 December 2024:
- S.07.01 Structured products
- S.08.02 Derivatives transactions
- S.21.01 Loss distribution risk profile
- S.21.03 Non-life distribution of underwriting risks – by sum-insured
- S.31.02 Information on special purpose vehicles
- NS.06 Business Model Analysis (Life)
Likewise, Risk margin changes will come into force on 31 December 2023 and the cost of capital rate will reduce from 6% to 4% for life, non-life insurance and reinsurance obligations. There will also be an amendment to the risk margin formula and introduction of a risk tapering factor.