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ABI argues Solvency II audit disclosure requirements onerous expensive small insurers mutual

Commenting on the ABI’s response to the PRA’s consultation on Solvency II external audit, Steven Findlay, ABI Senior Policy Adviser for Prudential Regulation, said:

Steven Findlay"The UK industry has supported the objectives of Solvency II since the beginning and invested significant time and resources to ensure it works as intended for the market. We are supportive of high-quality public disclosure within the rules and recognise the benefit that audit can give to external investors who rely on this information. However these proposals for external audit go beyond the requirements of Solvency II, which is designed to be maximum harmonising. This significantly and further increase costs for firms – the PRA’s own analysis indicates up to a five-fold increase in audit fee – even though the benefit is not clear.

"In particular, we have strong concerns regarding the significant and disproportionate costs of these proposals on mutual and smaller firms, and we therefore suggest the PRA makes use of its risk-based approach when developing audit proposals – this could mean these firms are not required to have their Solvency II disclosures audited every year.

"Solvency II should create a level playing field, and ensure the continuing competitiveness of the UK industry. We need more clarity on the value for money of these proposals before they are finalised and implemented."

 


Last updated 01/07/2016