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The start of the Solvency II era ABI establishes new industry forum on Prudential Regulation

The ABI is launching a new member forum to support and guide its objective of influencing and helping positively shape the prudential regulatory environment for UK insurers.

A key focus will be on the implementation of and future modifications to Solvency II, as well as the development of the emerging global Insurance Capital Standards.

David Innes

The ABI Prudential Regulation Committee will replace the ABI’s long-standing Solvency II Committee following the implementation of Solvency II at the beginning of this year. It will comprise of prudential regulatory affairs managers and senior technical specialists from 40 ABI members.

Its first chair will be David Innes, Group Capital and Financial Risks Director, RSA. The Committee’s first meeting will be on 17 March and will meet monthly.

Initial priorities for the Committee will include:

  • Engaging with the Prudential Regulation Authority’s Solvency II model change and model approval process. This is both for firms who have received internal model approval and need a workable process for updating their models, and for firms seeking model approval for the first time looking to build on the industry’s experience.
  • Implementing Solvency II reporting. Although the first annual reporting under Solvency II will not happen for another 12 months (for year-end 2016), the industry and regulators will need to continue to work together to ensure the smooth and successful implementation of this area of Solvency II. In particular a pragmatic approach will need to be taken to asset data, which will increase in quality and availability over the coming years.
  • Ensuring greater convergence and a more level-playing field across the EU to ensure the continuing competitiveness of UK industry.
  • Modifying the Solvency II Directive. This year the focus will be on the incorporation of infrastructure and securitisation asset classes into the Directive, to further enable long-term investment in the economy from insurers. Looking further ahead, the industry will contribute to the planned reviews of the standard formula calibration and important areas such as the size and volatility of the Risk Margin.
  • International Capital Standard (ICS). Development of the ICS and ensuring regulatory coherence with Solvency II.

ABI Prudential Regulation Committee Chair, David Innes said:

"I am delighted to accept the role of Chair of the ABI’s Prudential Regulation Committee. After substantial investment by industry, as well as the PRA, Solvency II is now live – however prudential regulation will not stand still. With a new chapter now underway, I look forward to working with ABI members to ensure that industry continues to be an important voice in these discussions as prudential regulation continues to evolve."

Last updated 01/07/2016