Prudential requirements for UK insurers—Pillar 1 requirements
Produced in partnership with Clyde & Co
Prudential requirements for UK insurers—Pillar 1 requirements

The following Insurance & Reinsurance practice note produced in partnership with Clyde & Co provides comprehensive and up to date legal information covering:

  • Prudential requirements for UK insurers—Pillar 1 requirements
  • Introduction to the prudential regulatory framework for UK insurers within the scope of Solvency II
  • Pillar 1—quantitative requirements—the PRA Rulebook
  • Aim of the quantitative capital requirements of Solvency II
  • Key Pillar 1 components
  • Calculation of liability requirements under the PRA Rulebook
  • Technical provisions in respect of insurance liabilities
  • Technical provisions in respect of long-term insurance liabilities—the long-term guarantees package
  • Regulatory capital requirements
  • Assets and qualifying regulatory capital—the PRA Rulebook
  • More...

Introduction to the prudential regulatory framework for UK insurers within the scope of Solvency II

This Practice Note is one of three that provide an overview of the prudential regulatory framework applicable to UK life and general insurers and reinsurers that fall within the scope of the Solvency II Directive (Directive 2009/138/EC, as amended) (Solvency II) following the implementation of Solvency II on 1 January 2016 (see Prudential requirements for UK insurers—introduction: Sources of law and regulation in respect of Solvency II).

Solvency II represented a major modernisation of European insurance regulation that had been in development since 2001. Unlike the previous more limited European reforms to insurance regulation in the early 2000s, known as Solvency I, Solvency II is largely a 'maximum harmonisation' regime, meaning that each of the different Member States is restricted from gold-plating the requirements when it is transposed into national law. The Solvency II regime is, therefore, intended to introduce a single set of key prudential requirements which will be applied consistently across insurance and reinsurance entities operating within the European Union (EU).

Following the UK’s departure from the EU, the UK’s implementation of the Solvency II regime has been amended in order to operate effectively in a UK only context and to reflect the fact that the UK is now outside the joint supervisory mechanism for Solvency II. As a result

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