Starting at the top, the UK Government managed to stay sellotaped together long enough to get the fundamental Solvency II legislative work pushed through Parliament before they disbanded for the General Election. The documentation is available in full here, with synopsis here. Interestingly, this formally obliges the PRA to review capital add-ons "at least" once a year, as well as to provide specific reporting to EIOPA on the topic. There is also a little more meat around the sticky issue of firms who breach their MCR, then look unlikely to rectify the matter.
The Government also released the findings of their Regulatory Policy Committee (RPC) in assessing whether Solvency II was going to be a blessing or a curse for Britain. This is actually a very handy drop-in document for your NEDs/peripheral programme figures, and is worth pushing on to them.
They do make the rather controversial statement that on top of the estimated £2.6bn cost to the industry of implementation (!!!!!), the ongoing costs of c.£200m a year will be due to reporting obligations (fair enough) as well as the need for a remuneration policy (hmmm?). Rather disparagingly, the Treasury merely estimate "un-quantified administrative benefits" off the back of improvements in risk management and governance arrangements.
The PRA have recently released the Policy Statement covering their final rules for Solvency II implementation, which on paper should contain no surprises (other associated materials available here). Generalist media chatter (here and here for example) was pretty underwhelming, and while Mark Carney emphasises in the statement that Insurers must be "robustly supervised", Andrew Bailey stated merely that while the "...new regime will not be perfect...it is a welcome step in the right direction"
On a lighter note, the European institutions got a bit beefy over the new year when the newly installed Commissioner Hill had his ears chewed by ECON's new Chair regarding a range of issues or unanswered questions regarding the Delegated Acts. Having given himself a couple of weeks to digest, he pinged out a reply thanking ECON for pointing out three typos, and otherwise defending his corner. Much of the background noise in this correspondence regarding infrastructure investment and EIOPA funding has had a life of its own for some time now - indeed, EIOPA's dummy was definitively spat on the matter last week when they "reprioritised" their 2015 work plan to account for budget cuts.
|B-ABI - got back?|
A parallel release for NEDs came from the PRA in the form of a slide pack and a monster 1hr 30m recording of the presentation which it accompanied. Clearly the PRA have seen enough gaps in the efforts of NEDs to date to go to these en-masse tutorial lengths, but the material on validation and ORSA in particular should be swallowed whole.