Insurance Europe’s Reinsurance Advisory Board (RAB) has urged the UK’s Prudential Regulation Authority (PRA) to either extend its Temporary Permissions Regime (TPR) or wait until the Treasury’s review of Solvency II is finalised before making changes to its regulatory requirements.
A recent consultation conducted by the PRA outlined proposed changes to Solvency II reporting requirements and expectations in the UK market.
However, Insurance Europe, which represents 37 national insurance associations, argues that the changes are relevant for several EU reinsurers with third-country branch undertakings in the UK or firms operating under the PRA’s temporary permissions.
At the same time, the UK Treasury is also reviewing Solvency II rules for re/insurers operating in the UK, but the transitional relief period offered to EU firms is set to end before a decision is made by the Treasury and changes can be incorporated into law.
Insurance Europe therefore urges that the PRA should consider the specific treatment of reinsurance ahead of the end of the transitional relief period or to extend it until the outcome of HMT’s review is known and implemented.
The federation says this would avoid firms having to implement a number of reporting requirements that may then cease to apply or need to be modified.
It would also remove the need for firms to apply for waivers or modifications of the reporting rules, as well as the requirement for the PRA assess any such applications.
The RAB also outlined several adjustments to the PRA’s Solvency II proposals that aim to ensure that the requirements appropriately capture the specific characteristics of reinsurance activities, while maintaining the principle of fair competition in and equal access to the UK market.
It further stressed that EEA reinsurers are subject to domestic rules equivalent to those in the UK, and so do not gain any advantage over any UK-based reinsurers in their capital and reporting requirements.