Update on Reporting requirements for non-Solvency II insurance firms – June 2016
- The rules will be published as set out in the CP 18/16.
- All friendly societies will be required to submit the first FSC2 return for financial year-end 2017.
- Actuarial Function Holder and With Profits Actuary will be replaced by the appointed actuary for all non-Solvency II friendly societies.
- Some simplifications to Forms required from non-Solvency II insurance companies but no change to frequency of reporting
Summary of PS19/16
In June 2016 the PRA published PS19/16—Reporting requirements for non-Solvency II insurance firms. This PS gives feedback on responses to CP 18/16 and it states the final rules for the new reporting requirements that apply to insurance firms outside the scope of Solvency II—referred to as non-Solvency II insurance firms (NDFs).
Non-Solvency II firms (except friendly societies)
The draft rules have been implemented broadly as propose but with a few formatting changes to Forms 3, 11, 12, 15, 16, 24, 28 and 60.
Clarification has also been given on reporting in an electronic format. The Bank of England Electronic Data Submission (BEEDS) portal can be used and the permissible formats are Excel, Word, PDF and PowerPoint. Alternatively the files can be emailed to firstname.lastname@example.org.
Non-solvency II firms—friendly societies
The draft rules have been implemented as propose. All NDF friendly societies will now have a simplified reporting return FSC2 which is produced every 3 years. FSC1 and FSC3 will no longer be required.
For the in between years a Form 4 is required where the Appointed Actuary certifies (if applicable) that there have been no material changes in the financial condition of the society.
Feedback from the PRA
There were two concerns we raised with the PRA which they answered in the Policy Statement:
- We were concerned that because most NDF friendly societies had external actuarial consultants due to their size. By aligning the three year reporting cycle there would be a spike of work at these consultancies. This may have management/ cost implications. The PRA recognised this issue but felt the six month reporting deadline was sufficient time for external consultancies to complete their reporting requirements.
- It was also not clear from the original CP whether an Actuarial Function Holder and With Profits Actuary would be required in addition to the Appointed Actuary. The PRA have confirmed that only an Appointed Actuary is required and they will be amending the Actuarial Requirements Part of the rulebook.
We will be contacting each of our clients to discuss the impact of the change to the regulatory reporting requirements.
If in the meantime you have any questions please contact me at the email address overleaf.