Solvency II - HM Treasury publishes draft Regulations and explanatory guidance - 15 November 2021
HM Treasury has published a draft of The Solvency II (Group Supervision) (Amendment) Regulations 2021 (the Regulations), together with an explanatory memorandum. The Regulations amend regulations 24, 25, 26 and 28 of the Solvency II Regulations 2015 (SI 2015/575), which originally transposed the Solvency II Directive (2009/138/EC) (Solvency II) in the UK, to address deficiencies from the UK’s exit from the EU. The Regulations are made under the power in section 8 of the European Union (Withdrawal) Act 2018.
The Regulations allow the PRA to continue to disapply, in certain circumstances, all relevant insurance group supervision requirements relating to UK insurance groups whose parents are overseen by supervisory authorities in equivalent third countries. The PRA may only disapply group supervisor requirements if: (i) compliance by the insurance group with relevant requirements would be unduly burdensome; and (ii) the determination would not adversely affect the advancement of any of the PRA’s objectives.
Without this instrument, existing waivers granted by the PRA in accordance with European Insurance and Occupational Pensions Authority (EIOPA) guidelines prior to the UK’s exit from the EU would expire on 31 March 2022, when the transitional relief granted by the PRA ends (pursuant to Part 7 of the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (SI 2019/632)).
HM Treasury engaged extensively with the PRA during the instrument’s drafting. No consultation will be undertaken.
The Regulations will come into force on 24 January 2022.
Draft Statutory Instrument: The Solvency 2 (Group Supervision) (Amendment) Regulations 2021