Friday, 19 July 2013

PRA's take on EIOPA Guidance - no truck with dual reporting?

One of the Barnett Waddingham crew was kind enough to make a few notes about the PRA's current position, presented in an industry briefing back in early June (slides seemingly unavailable). While it didn't touch on pre-application for internal models, it did publicly tease out a few more details on ORSA and System of Governance from those already available, for example;

  • The concept of a "Glide Path" towards ultimate Solvency II compliance, which is being agreed between firms and the PRA, to make up for the lack of certainty around both EIOPA's requirements from 2014 and of course the ultimate 'Go Live' date itself - gives both parties plenty of wriggle room in their preparations
  • PRA are currently doing an "EIOPA vs PRA" comparison, but are not looking to change the PRA Handbook (which would neccesitate a consultation period, and therefore wouldn't be ready for 2014)
  • That the PRA are not especially enamoured with their reporting requirements up to EIOPA!
  • That the PRA believe that the trilogue discussions will be concluded before EIOPA's guidelines come into force. That seems less likely with every passing day
  • That the PRA do not have the resources to feedback on any of the firms' efforts in the Solvency II reporting space
I guess the slightly odd thing is that the PRA have just announced a radically reduced Special Purpose Fee for Solvency II preparation (only £3.1m for IMAP, and a rebate for non-IMAP due to underspend last year - compare that to previous years!). Could they perhaps have just hung on to a bit more cash to provide a more substantial service in the next 18 months, or have they also given up the ghost on anything of substance happening in the foreseeable future?

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