Prudential Regulation Authority Rulebook

8.1

The calculation of the solvency of a group must take account of the proportional share held by the participating undertaking in its related undertakings.

[Note: Art. 221(1) of the Solvency II Directive]

8.2

For the purposes of 8.1, the proportional share must comprise either of the following, subject to 8.3:

1. (1) where method 1 is used, the percentages used for the establishment of the consolidated accounts; or
2. (2) where method 2 is used, the proportion of the subscribed capital that is held, directly or indirectly, by the participating undertaking.

[Note: Art. 221(1) of the Solvency II Directive]

8.3

The changes to this rule are effective from 23:00 on 31/12/2020.

Notwithstanding 8.2:

1. (1) where the related undertaking is a subsidiary undertaking and does not have sufficient eligible own funds to cover its SCR, the total solvency deficit of the subsidiary undertaking must be taken into account (or a proportional share of that solvency deficit, if the group supervisor so determines under regulation 17(4) of the Solvency 2 Regulations or Solvency II EEA implementing measures implementing Article 221(1) of the Solvency II Directive); and
1. [Note: Art. 221(1) of the Solvency II Directive]
2. (2) the proportional share must be as determined by the group supervisor if such a determination is made under regulation 17(2) of the Solvency 2 Regulations or Solvency II EEA implementing measures implementing Article 221(1) of the Solvency II Directive.
1. [Note: Art. 221(2) of the Solvency II Directive]