This consultation seeks views on a draft supervisory statement which sets out the PRA’s expectations of firms in relation to existing rules on the valuation of financial assets.
The draft supervisory statement is intended to apply to all PRA-authorised insurers (firms) and may also be relevant to insurance holding companies and other entities in the same group, together with their advisors. The statement is intended to be equally relevant for life and general insurers - whether they are mutuals or proprietary companies.
The statement seeks to reduce the risk to the PRA’s objectives caused by intended or unintended misstatement of values and hence misstatement of capital resources, by clarifying the PRA’s existing expectations. The statement is therefore designed to help the PRA meet its statutory objectives to promote the safety and soundness of the firms it regulates and contribute to securing an appropriate degree of protection for policyholders, along with its secondary competition objective.
The statement does not represent a change of policy. Future clarifications or expectations on the topic of valuation risk may be added to the statement. Statutory obligations
The PRA has considered matters to which it is required to have regard, and it considers that this draft statement is compatible with the Regulatory Principles in section 3B of the Financial Services Act 2012(1) and relevant provisions of the Legislative and Regulatory Reform Act 2006. The PRA has considered equality and diversity issues and has not identified any impacts arising from the statement.
Any comments should be sent by Friday 11 July 2014.
Full consultation paper
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