European Commission
Solvency II - Commission Implementing Regulation on technical information for calculating technical provisions and basic own funds for Q3 2022 reporting published in OJ - 9 August 2022
Commission Implementing Regulation (EU) 2022/1384, which lays down technical information for the calculation of technical provisions and basic own funds for reporting under the Solvency II Directive (2009/138/EC) (Solvency II), has been published in the Official Journal of the EU.
The Implementing Regulation sets out the technical information that insurers and reinsurers should use when calculating technical provisions and basic own funds for reporting with reference dates from 30 June until 29 September 2022. The European Commission adopted the Implementing Regulation on 8 August 2022. It entered into force on 10 August 2022.
Commission Implementing Regulation (EU) 2022/1384 of 8 August 2022 laying down technical information for the calculation of technical provisions and basic own funds for reporting with reference dates from 30 June 2022 until 29 September 2022 in accordance with Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance
Please see the General section for an item on policy statement PS7/22 which includes updates to the PRA's approach to Solvency II technical information.
Financial Markets Law Committee
RAO - FMLC publishes report on “similar contracts of guarantee” in definition of a “contract of insurance” - 9 August 2022
The Financial Markets Law Committee (FMLC) has published a report on “similar contracts of guarantee” in the definition of “contract of insurance” in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (the RAO).
Article 3(1) of the RAO extends the meaning of the term “contract of insurance” for regulatory purposes. The report is concerned with the inclusion within the scope of insurance regulation, subject to certain qualifications, of “fidelity bonds, performance bonds, administration bonds, bail bonds, customs bonds or similar contracts of guarantee”. The FMLC explains that it is unclear which contracts fall within this description. The FMLC established a working group to consider the uncertainties arising from the phrase, “similar contracts of guarantee”, and makes the following recommendations on how these uncertainties may be mitigated:
- update the FCA guidance in PERG 6.7 to clarify the situations in which the definition might apply;
- amend the definition of a “contract of insurance” in the RAO so as to include a new activity-based exclusion, which would be made available to both UK insurance investment businesses and investment businesses established outside the UK (provided that in each case their investment business activity is sufficiently significant and central to their business that they are properly characterised as ‘investment firms’ for UK regulatory purposes); and
- amend the legislation to clarify the ways in which a contract of guarantee needs to be similar to the instruments listed in the RAO definition, including by providing that the similarity be grounded in something more than just being a protection contract.
FMLC Report: The words “similar contracts of guarantee” in the definition of “a contract of insurance” in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001
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