KPMG UK responds to the PRA’s Policy Statement on Solvency II

“Today’s publications by the PRA clarify important details relating to how the Internal Model and Capital Add-On regimes will work in practice. All-important final rules on reporting and the Matching Adjustment regime are still outstanding.

“The changes to the capital add-on regime are modest but intended to be helpful. Insurers will welcome the PRA’s commitment that it does not intend to use capital add-ons to structurally increase the capital held in the market.

“Insurers will certainly welcome a new six-month grace period to plan integration of internal models following an acquisition. This is a sensible adjustment to the original proposal to require plans for alignment on Day 1 following completion of a deal.

“Increasing the threshold for companies to enter the Solvency UK regime from £15m premium income to £25m is also welcome and should contribute to making the UK a more attractive place to set up an insurance business.”

*And the publication by HM Treasury of the related Statutory Instrument

-ENDS-

For further information please contact:

KPMG Media Relations

Gerard Swinley

Gerard.swinley@kpmg.co.uk

M: +44 7510 375540

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 18,000 partners and staff. The UK firm recorded a revenue of £2.96 billion in the year ended 30 September 2023. 

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.