The Prudential Regulation Authority (PRA) has launched a consultation on its proposed approach to interpreting and applying the definition of an insurance holding company. The proposal is for the revised definition to be used in the Group Supervision Part of the PRA Rulebook. The aim is to provide a definition that distinguishes an insurance holding company from a mixed-activity insurance holding company. The proposals include amendments to supervisory statement SS 9/15: Solvency II: group supervision.
The Solvency 2 Regulations 2015 currently provide a definition of an insurance holding company that captures entities whose main business is to acquire and hold participations in subsidiary undertakings that are ‘exclusively or mainly’ insurance or reinsurance undertakings or third country insurance or reinsurance undertakings. The PRA proposes to amend the definition to interpret ‘mainly’ by reference to the proportion of a group‘s assets, revenues or capital requirements that are derived from insurance or reinsurance subsidiaries, or ancillary insurance services undertakings (i.e. undertakings that service the insurance part of the group). The PRA also proposes to clarify its expectations for the information required from firms in order to distinguish an insurance holding company from a mixed activity insurance holding company. These expectations will be set out as further guidance in SS 9/15.
Responses to this consultation are requested by 6 December 2021. The proposed implementation date for the changes is 28 February 2022.
View: PRA launches consultation on the UK definition of an insurance holding company