On Feb. 29, UK PRA issued near-final rules on SLV2 reporting phase 2.
PRA issued policy statement (PS) 3/24 Review of Solvency II: Reporting and disclosure phase 2 near-final, containing near-final rules and updated near-final policy materials.
This PS should be read in conjunction with PS2/24 on adapting SLV2 to UK market.
Follows UK PRA Nov. 2022 reporting phase 2 of SLV2 review proposals, see #152889.
Also follows UK PRA Feb. 2024 policy on adapting SLV2 to UK market, see #202884.
Policy Statement
PS3/24 sets provides feedback to responses to consultation paper (CP) 14/22Review of Solvency II: Reporting phase 2 as well as responses to chapter 7 on reporting and disclosure of CP12/23 Review of Solvency II: Adapting to the UK insurance market.
PS3/24 also sets out PRA's final reporting and disclosure policy following consultation.
The rule instruments and policy material are near-final due to the potential for further changes resulting from PRA's phased plan for consulting on Solvency II reform.
And transfer of remaining firm-facing Solvency II requirements into PRA Rulebook.
Any further changes are expected to be minor and near-final rules and policy materials in policy statement will be finalized later in 2024 as part of transfer of requirements.
Changes to Draft Policy
PRA received 28 responses to chapter 7 of CP12/23 and 18 responses to CP14/22.
Most were supportive of PRA's aims to review stock of EU-derived and PRA insurance reporting, reflecting key themes of reducing information reported, avoiding changes.
PRA considered the responses and as a result has made changes to its draft proposals.
Changes made to draft rules proposed in CP14/22 include: PRA will not proceed with the introduction of the proposed new template S.05.04 on activity by country.
Instead with introduce simplified versions of the existing solo level reporting on insurance activity and best estimate-liabilities as basis for country-level reporting.
Will still delete current country-level templates S.04.01, S.04.02, S.12.02 and S.17.02.
PRA will not proceed with introduction of proposed new S.14.02 template on non-life product obligations; it will delete existing S.37 template on risk concentration.
Further amend proposed NS.07 template on non-life business model analysis and S.05.03 on life revenue to align them; simplify S.14.03 on cyber risk underwriting.
Further simplify proposed reporting on reinsurance; and revert back to quarterly reporting of S.12.01.02, S.17.01.02 on life and non-life technical provisions.
Changes from CP12/23
PRA also makes changes to the draft rules proposed in CP12/23 to: maintain the existing 11-week remittance deadline for QMC.01, rather than proposed 5 weeks.
Remove proposed split of group balance sheet and group SCR result by internal model and standard formula parts from templates SR.02.1, SR.25.04 at group and RFF level.
In addition to the proposals in both CPs, has also made some presentational changes to the near-final rules to enhance readability of reporting and disclosure requirements.
Includes merging remaining NST requirements into new chapter 2A of Reporting Part of Rulebook and changes to some of the rule headings and template descriptions.
Also merges NS.00 and S.01.01 templates that both set out the contents of reporting submissions to support the single taxonomy.
Rule Changes
The near-final PRA Rulebook: Solvency II Reporting Reform Instrument [2024] will make changes to the External Audit, Fees and Reporting Parts of the PRA Rulebook.
Also amendment and transfer to the Reporting Part of those reporting and disclosure templates and instruction files that are to be retained as part of Solvency UK.
And are currently contained in onshored Commission Implementing Regulation (EU) 2015/2450 (ITS 2015/2450), onshored Commission Implementing Regulation (EU) 2015/2452 (ITS 2015/2452) and the EIOPA Third Country Branch Guidelines.
PRA has also made amendments to the third country branch guidelines.
Policy Materials
Supervisory statements (SS) are updated: SS11/16Solvency II: External audit of, and responsibilities of, the governing body in relation to the public disclosure requirement.
SS25/15Solvency II: Regulatory reporting, internal model outputs; SS40/15Solvency II: reporting and public disclosure options provided to supervisory authorities.
SS44/15Solvency II: third-country insurance and pure reinsurance branches; SS7/17Solvency II: Data collection of market risk sensitivities; SS17/16Solvency II: internal models - assessment, model change and the role of non-executive directors.
Deletion of SS36/15Solvency II: life insurance product reporting codes; SS6/18National Specific Templates LOG files; SS11/15Regulatory Reporting and exemptions.
Introduced new statement of policy (SoP) Solvency II regulatory reporting waivers.
Effectiveness
Policy will come in effect Dec. 31, 2024 for triennial, annual, semi-annual, quarterly requirements with reporting/disclosure reference date of Dec. 31, 2024 and onwards.
PRA will publish final taxonomy shortly after publication of PS3/24 reflecting the near-final policy, which will cover all XBRL-based insurance reporting from Dec. 31, 2024.
There will be a single source of PRA insurance reporting requirements within the PRA Rulebook from Dec. 31, 2024.
In Apr. 2024, UK PRA issued consultation on SLV2 assimilated law, see #209496.
