Guidance

SS4/15 – Solvency II: the solvency and minimum capital requirements

Chapter

Introduction

Printed on: 06/11/2024

Rulebook at: 01/01/2016

1

Introduction

1.1

This supervisory statement sets out the Prudential Regulation Authority’s (PRA’s) expectations of firms in relation to the calculation of their solvency capital requirement (SCR) under Solvency II.

  • 01/01/2016

1.2

In particular, this statement expands on the following topics:

  • undertaking specific parameters;
  • significant deviations from the assumptions underlying the standard formula, internal models, or the system of governance;
  • reversion to the standard formula;
  • statistical quality standards; and • calculation of the minimum capital requirement.
  • 01/01/2016

1.3

This statement should be read alongside the relevant European legislation, as well as the Solvency Capital Requirement Parts and Minimum Capital Requirement Part of the PRA Rulebook.

  • 01/01/2016

1.4

This statement expands on the PRA’s general approach as set out in its insurance approach document.[1] By clearly and consistently explaining its expectations of firms in relation to the particular areas addressed, the PRA seeks to advance its statutory objectives of ensuring the safety and soundness of the firms it regulates, and contributing to securing an appropriate degree of protection for policyholders. The PRA has considered matters to which it is required to have regard, and it considers that this statement is compatible with the Regulatory Principles and relevant provisions of the Legislative and Regulatory Reform Act 2006. This statement is not expected to have any direct or indirect discriminatory impact under existing UK law.

  • 01/01/2016

1.5

This statement has been subject to public consultation[2] and reflects the feedback that was received by the PRA.

  • 01/01/2016