The PRA's strategy The PRA and the BoE Until 1 March 2017, the Prudential Regulation Authority (PRA), was a subsidiary company of the Bank of England (BoE) delivering micro prudential supervision and regulation together with the Financial Policy Committee (FPC) which delivered macro prudential obligations. However, the introduction of the Bank of England and Financial Services Act 2016 (Commencement No. 4 and Saving Provision) Regulations 2017, dated 20 January 2017 brought certain provisions of the Bank of England and Financial Services Act 2016, including sections 12-15, into force ending the subsidiary status of the PRA. From 1 March 2017 the PRA commenced acting through the Bank's Prudential Regulation Committee (PRC). HM Treasury made recommendations to the PRC about aspects of the government’s economic policy to which the PRC will have regard when carrying out its activities. HM Treasury can also direct the Bank to take actions to implement the UK’s obligations under the Capital Requirements Directive IV and the Bank Recovery and Resolution Directive, and to refrain from taking actions that are incompatible with those obligations. The

Authorised people can only carry out regulated activities in the UK in accordance with their permission. Where people intend to change how they carry out their regulated activities they are likely to need to apply to vary their permission. This Practice Note is an overview of how firms can apply to the Prudential Regulation Authority (PRA) to vary their Part 4A permission. For guidance on where firms cease to carry out their activities altogether, see Practice Note: Prudential Regulation Authority—cancelling permission and requirements. Permission and requirements Under the old Financial Services Authority (FSA) regime, a Part IV permission could include any requirement the FSA considered appropriate. This is no longer the case. The PRA's powers relating to permission are distinct from its powers relating to requirements (namely to impose or vary a requirement) and the two sets of powers are treated separately under the current regulatory regime (FSMA 2000, ss 55F and 55M). As a result firms will need to apply separately to the PRA: • to vary their Part 4A permission, and/or

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 UK framework, which is derived from the Solvency II Directive (Directive 2009/138/EC) (Solvency II). This Practice Note considers how the key elements of the Pillar 1 quantitative requirements are reflected in the Prudential Regulation Authority (PRA) Rulebook, including: • the valuation of assets and liabilities, including technical provisions for insurance liabilities • regulatory capital requirements, including the solvency capital requirement (SCR), the minimum capital requirement (MCR) and technical provisions for insurance liabilities • own funds requirements, comprising basic own funds and ancillary own funds • investment requirements, including the prudent person principles (PPP) For an introduction to the prudential requirements affecting UK insurers, see: Prudential requirements for UK insurers—introduction. For information on Pillar 2 (governance and supervision) and Pillar 3 (reporting and disclosure), see Practice Note: Prudential requirements for UK insurers—Pillar 2 and Pillar 3 requirements. Pillar 1: quantitative requirements

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 UK framework, which is derived from the Solvency II Directive (Directive 2009/138/EC) (Solvency II). This Practice Note considers the Pillar 2 and Pillar 3 requirements applicable to insurers. For an introduction to the prudential requirements affecting UK insurers, see: Prudential requirements for UK insurers—introduction. For information on Pillar 1 (quantitative capital and solvency requirements), see Practice Note: Prudential requirements for UK insurers—Pillar 1 requirements. Pillar 2 overview—Risk management, governance and supervision Risk management is central to the prudent management and good governance of insurers and therefore forms part of the key aspects of prudential regulation. Solvency UK requires insurers to consider the risks in respect of their businesses, the corresponding capital requirements and the adequacy of capital resources through an 'own risk and solvency assessment' (ORSA). This is a forward-looking assessment that should take into account the

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 UK framework, which is derived from the Solvency II Directive (Directive 2009/138/EC) (Solvency II). This Practice Note provides an introduction to the prudential requirements for UK insurers under the Solvency UK framework. For information on prudential requirements under the three Pillars, ie Pillar 1 (quantitative capital and solvency requirements), Pillar 2 (governance and supervision) and Pillar 3 (reporting and disclosure), see Practice Notes: Prudential requirements for UK insurers—Pillar 1 requirements and Prudential requirements for UK insurers—Pillar 2 and Pillar 3 requirements. For a chronological tracker of the development and implementation of the Solvency UK framework, including links to UK legislation, rules and guidance, see: Solvency UK—timeline. For information about the EU Solvency II framework, see Practice Notes: EU Solvency II—essentials, FLASHCARD—EU Solvency II and EU Solvency II—legislative framework and structure. For a chronological tracker of the development and implementation of the

This Practice Note looks at the Bank of England (BoE) and the Prudential Regulation Authority (PRA)’s supervisory expectations for banks and insurers on the management of climate-related financial risks, set out in supervisory statement SS3/19 (updated November 2024), as well as related policy statement PS11/19. Background and introduction On 15 April 2019, the PRA published PS11/19: Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change, which provided feedback to responses to consultation paper CP23/18 and also contained the final SS3/19 setting out the PRA’s expectations on the topic. The PRA noted that climate change, and society’s response to it, present financial risks which are relevant to the PRA’s objectives and that while the financial risks from climate change may crystallise in full over longer term horizons, they are already becoming apparent. SS3/19 set out the PRA’s expectations that firms take a strategic approach to managing climate-related financial risks, identifying current risks and those that could plausibly arise in the future, and appropriate actions to mitigate those risks.

Ireland—Banking & Financial services analysis: This article was written by the Patrick Brandt and Jill Shaw of A&L Goodbody LLP and discusses the Capital Requirements Directive, as recently amended, introduces new obligations for the management bodies of EU credit institutions. They must now develop and oversee detailed plans to address financial risks linked to ESG factors..

Article 4(5) of each of the GDPR regimes explain the concept of ‘pseudonymisation’ of data, which means: ‘…the processing of personal data in such a manner that the personal data can no longer be attributed to a specific data subject without the use of additional information, provided that such additional information is kept separately and is subject to technical and organisational measures to ensure that the personal data are not attributed to an identified or identifiable natural person;’

Liability for psychiatric injury is dependent in part on the nature of the injuries suffered and the manner in which they were sustained. Classifying the victim Where a claimant suffers both physical and psychiatric injury (even if the physical injury was very minor), they will be entitled to recover damages in the usual way subject to issues of causation etc. There will in such a case be no need to prove the foreseeability of the psychiatric injury if the physical injury was itself foreseeable. The complexity arises where a claimant has suffered psychiatric injury but is physically unharmed. In cases where claimants have suffered ‘pure’ psychiatric injury as a result of an accident or event, the law draws a distinction between: • primary victims—see below • secondary victims—see below Primary victims Primary victims are directly involved in the event and usually, but not necessarily, have physical injuries as well as psychiatric injuries. For further guidance, see Practice Note: Psychiatric injury—primary victims. Establishing liability—common law To establish liability at common law a primary victim

Pre-existing legal relationships Sometimes psychiatric injury will occur in circumstances where there is a pre-existing legal relationship between the claimant and the defendant. There will be occasions when the nature of that relationship is such that it imposes a duty on the defendant to take reasonable care not to inflict psychiatric injury. For example: • occupational stress cases: these provide perhaps the most obvious examples of the operation of a pre-existing legal duty not to cause ‘pure’ psychiatric harm. See Practice Notes: Occupational stress claims—breach, causation and apportionment and Occupational stress claims—liability and foreseeability • health authority cases in which there is a liability for communication of distressing news: in such cases there is an established relationship between the parties. It may be foreseeable that the negligent provision of inaccurate information, or even insensitive communication of accurate information, might cause psychiatric injury. For example: ◦ a claimant suffered post-traumatic stress disorder after being told, wrongly, that his baby had died (it is noteworthy, though, that the judge’s reasoning in this case was that the claimant was

Defining the primary victim A primary victim is a claimant who was directly involved as a participant in the incident that caused their psychiatric injury. Classes of primary victim Lord Oliver in Alcock v Chief Constable South Yorkshire provided three examples of claimants who he would classify as primary victims: Direct involvement The claimant was within the actual area of physical danger when the accident occurred or reasonably believed at the time that they were in danger. Rescue The House of Lords in White v Chief Constable of South Yorkshire Police clarified that rescuers are not a special category of primary victim. If the claimant was a rescuer who went to the aid of others involved in an accident, they will only be defined as a primary victim if they were, or reasonably believed themselves to be, in danger. If a rescuer does not meet this test, then they will be classified as a secondary victim and will therefore need to satisfy the control mechanisms before they can recover damages for psychiatric injury.

The development of the law The case of Alcock v Chief Constable of South Yorkshire Police has long been the lead authority for claims made by secondary victims. The law developed after Alcock, often with inconsistent judgments. The Supreme Court in Paul v Royal Wolverhampton NHS Trust brought about a number of changes to the law and much-needed clarity for practitioners. It is important to understand the position both prior to and post the case of Paul as there has been refinement and clarification of the principles, although not every aspect has been changed. This Practice Note is therefore split into pre-Paul and post-Paul sections. The changes made by Paul are explicitly highlighted in the Practice Note. For further analysis of the case, see News Analysis: Landmark Supreme Court decision on secondary victims (Paul v Royal Wolverhampton NHS Trust). It is crucial to understand that secondary victim claims constitute an exception to the general rule that at common law one person has no legal right of redress (compensation) in connection with the physical well-being