Prudential Regulation Authority Rulebook

1.1

Unless otherwise stated, this Part applies to:

1. (1) every UK Solvency II firm:
1. (a) that is a member of a group for which the PRA is the group supervisor;
2. (b) that is a member of a group for which a supervisory authority (other than the PRA) is the group supervisor, subject to (c) and to the extent this Part gives effect to the Solvency II EEA implementing measures in the EEA State of its group supervisor; and
3. (c) where the group supervisor of a group of which a firm is a member is a supervisory authority in an EEA State other than the UK, the requirements of the Solvency II EEA implementing measures in that EEA State apply to the firm in relation to its capacity as a member of that group;
2. (2) in accordance with Insurance General Application 3, the Society as a mixed activity insurance holding company, as modified by 21; and
3. (3) a UK holding company.

1.2

In this Part, the following definitions shall apply:

close links

means a situation in which two or more persons are linked by control or participation, or a situation in which two or more persons are permanently linked to one and the same person by a control relationship.

[Note: Art. 13(17) of the Solvency II Directive]

delegated act

means Commission Delegated Regulation (EU) 2015/35 supplementing 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 (Solvency II).

financial institution

has the meaning given in point (26) of Article 4(1) of the CRR.

group supervisor

means (in relation to a group) the authority designated as group supervisor in relation to that group, in accordance with Article 247 of the Solvency II Directive.

intermediate holding company

means an insurance holding company or a mixed financial holding company through which a Solvency II undertaking in a group holds a participation in a related Solvency II undertaking, a third country insurance undertaking or a third country reinsurance undertaking.

method 1

means the method for calculating group solvency described in 11.1.

method 2

means the method for calculating group solvency described in 12.1.

mixed activity insurance holding company

means a parent undertaking, other than a Solvency II undertaking, a third-country insurance undertaking, a third-country reinsurance undertaking, an insurance holding company or a mixed financial holding company, the subsidiary undertakings of which include at least one Solvency II undertaking.

[Note: Art. 212(1)(g) of the Solvency II Directive]

own funds eligible for the group SCR

means:

1. (1) in relation to method 1, the own funds eligible for the group SCR in accordance with 11.1(3); and
2. (2) in relation to method 2, the aggregate eligible own funds of the group referred to in 12.2.

own funds eligible for the SCR

means the aggregate of the firm’s:

1. (a) Tier 1 own funds; and
2. (b) eligible Tier 2 own funds; and
3. (c) eligible Tier 3 own funds.

related Solvency II undertaking

means a Solvency II undertaking that is a related undertaking of another undertaking.

related undertaking

means, in relation to an undertaking (“U”):

1. (1) any subsidiary undertaking of U; or
2. (2) any undertaking in which U or any of U’s subsidiary undertakings holds a participation; or
3. (3) any undertaking linked to U by an Article 12(1) relationship; or
4. (4) any undertaking linked by an Article 12(1) relationship to an undertaking in (1), (2) or (3).

solvency deficit

means the amount (if any) by which the related undertaking’s eligible own funds fall short of its solvency capital requirement under the SCR Rules or the relevant Solvency II EEA implementing measures as appropriate.

UK holding company

means an insurance holding company or mixed financial holding company that:

1. (1) is incorporated in the UK; or
2. (2) has a place of business in the UK.