I suspect a mix of suitability, financial necessity and pragmatism has led the regulator to pursue a relatively relaxed take on ICA+ , for example;
- It is "not a condition for IMAP review or approval"
- It "does not require Solvency II tests and standards [for internal model approval] to be met"
- Firms will confirm the scope of material which needs to be reviewed for ICA+ assessment, rather than the FSA themselves
- They also confirm that it is "not [their] intention" to bring in Solvency II reporting requirements "...any sooner than required by EIOPA"
That said, while the FSA try to thin out the field by noting that ICA+ is "most appropriate" for firms who are both in IMAP and due for a business-as-usual ICA review in the next two years, it would make sense for anyone in IMAP to pursue ICA+, more than anything because of the interminable delays in Europe might put a firm outside of ICA+ at a competitive disadvantage on the capital front.
The onus therefore appears to be on the industry to quantify and explain the differences between the inputs, processes and outputs of their ICA models and Solvency II models, as well as demonstrate how their ORSA processes address the existing requirements of INSPRU, specifically targeting INSPRU 7. There is also a sneaky request for a self-assessment of progress towards achieving compliance with the Solvency II tests and standards for internal model approval.
From a practitioner's perspective, I had a particularly large chortle at the requirement for all materials being used in the ICA+ assessment to have been approved by the firm's Board - I'm sure they are looking forward to another two years of swollen board packs...
There is more information to follow from the FSA in Q2 of this year, presumably on the basis that the LTG assessment activity they are on the hook for will have concluded, and more focus can be shifted to this pioneering work. Congratulations to them for not overegging this particular pudding, on paper at least.