Commenting on today’s publication by the PRA of its response to the consultation on CP12/23 rules for Solvency UK*, Huw Evans, Insurance Partner, KPMG UK said:
“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
