On 25 November 2016, the PRA published an update to supervisory statement SS17/15: Solvency II: transitional measures on risk-free interest rates and technical provisions (the November update).
SS17/15 was originally published on 20 March 2015 following consultation paper CP3/15: Solvency II: transitional measures and the treatment of participations. SS17/15 is of particular interest to firms considering applying for or that have been granted approval to use either the transitional measure on the risk-free interest rate or the transitional measure on technical provisions.
It should be noted that the information in this updated supervisory statement does not affect the content of supervisory statement SS6/16: Recalculation of the ‘transitional measure on technical provisions’ under Solvency II published in May 2016.
The November update includes the following amendments to SS17/15:
- Sets out the PRA’s expectations for Part VII transfers;
- Sets out the PRA’s expectations for reinsured business;
- Sets out the limits of the transitional measure to technical provisions;
- Sets out the PRA’s expectations regarding the review of the individual capital guidance;
- Sets out the management of the run-off of transitional measure on technical provisions (TMTP) relief in future years;
- Updates SS17/15 to request firms to inform the PRA of any other approvals for which they intend to apply but no longer limits this to the next 12 months;
- Sets out the PRA’s expectations for the verification of calculations; and
- References to the Directive have been updated with references to the PRA Rulebook where appropriate.