7
Significant insurance holdings
7.1
As announced in the PRA statement on 29 June 2013 and reiterated in PS7/13, the PRA requires firms to follow the default position in CRR Article 49(1). Firms are therefore required to deduct holdings of own funds instruments issued by an insurer in which the firm has a significant investment.
- 01/01/2023
7.2
For the purposes of valuation, the PRA considers that the embedded value method is not appropriate for determining the value of firms’ significant insurance holdings. This is because the embedded value method could have the effect of inflating banks’ CET1 as it takes into account the present value of the expected future inflows from existing life assurance business.
- 01/01/2023