PS15/8: Solvency II

In this Policy Statement we report on the main issues arising from four FSA consultation papers.

Why are we publishing this paper?

The Solvency II Directive is being transposed into the UK by the FCA and the Prudential Regulation Authority (PRA). It comes into effect for firms from 1 January 2016. We (the FCA) are changing our rules, both to transpose some of the articles and to harmonise our rules with the Directive. We are publishing our final rules in this paper.

Policy Statement PS15/8 [PDF]

Who does this Policy Statement affect?

The FCA rules giving effect to parts of the Directive, and the changes to other rules and guidance set out in this Policy Statement, apply to most insurance and reinsurance firms. ‘Non-Directive’ firms are excluded from Solvency II - these are broadly those firms with gross premium incomes below €5m and gross technical provisions below €25m. Non-Directive firms should be aware of the changes as well. The PRA has also published rules to give effect to the rest of the Directive and made changes to their own rules.

What do you need to do next?

Insurance and reinsurance firms will need to prepare themselves to comply with these changes from the start date of the Solvency II Directive on 1 January 2016.

What will we do?

We will also be making arrangements to comply or ensure consistency with the requirements of the Solvency II Directive and related Solvency II material. Supervisors will be discussing with selected firms how they are preparing to comply with the rules and ensure effective and timely implementation of the Directive requirements.

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