The Solvency 2 Regulations 2015

CHAPTER 1 Procedure: applications

Meaning of “approval”, “group application”, “protected item” and “branch”

38.—(1) In this Part and in Schedules 4 and 5—

“approval” means an approval granted by the PRA under this Part;

“group application” means an application for permission to calculate any of the following matters in accordance with an internal model—

(i)

the consolidated group solvency capital requirement for a group and the solvency capital requirements for the insurance undertakings and reinsurance undertakings in the group in accordance with method 1(1);

(ii)

the aggregated group solvency capital requirement in relation to group solvency determined in accordance with method 2(2); and

“protected item” has the same meaning as in section 413 of FSMA.

(2) In regulations 40, 50 and 51, “branch” has the meaning given in Article 162 of the Solvency 2 Directive.

Applications: eligibility, process, information and documents

39.—(1) This regulation applies to an application to the PRA for—

(a) the grant of an approval; or

(b) a variation of an existing approval.

(2) An insurance undertaking, reinsurance undertaking or third-country insurance undertaking may apply for an approval under regulations 41 to 48, 53 and 54 only if it is authorised under Part 4A of FSMA.

(3) Subject to paragraph (9) an application must—

(a) be made in such manner as the PRA may direct; and

(b) contain, or be accompanied by, such other information or documents as the PRA may reasonably require.

(4) At any time after receiving the application and before determining it, the PRA may require the undertaking to provide it with such further information or documents as it may reasonably require.

(5) The PRA may require any information provided under this regulation to be provided in such form and verified in such manner as it may reasonably require.

(6) The PRA may require any documents provided under this regulation to be produced at such place and authenticated in such manner as it may reasonably require.

(7) Different directions may be given, and different requirements imposed, in relation to different applications or categories of application.

(8) The powers conferred on the PRA by this regulation—

(a) must be exercised in accordance with any directly applicable regulation made under the Solvency 2 Directive; and

(b) may not be used to require the production of a protected item.

(9) An application under regulation 50 (approval of third-country insurance undertakings in more than one EEA State) is valid only if the following requirements are satisfied—

(a) the same application is also made to the supervisory authorities in all the EEA States in which the undertaking is authorised or has applied for authorisation;

(b) the application states the supervisory authority which is to supervise the solvency of the entire business of the undertaking’s branches; and

(c) the application gives reasons for the choice of supervisory authority referred to in sub-paragraph (b).

(10) Where an application has been made to the PRA under regulation 43 (volatility adjustment), paragraphs (3)(b) and (4) may only be used to require—

(a) a liquidity plan projecting the incoming and outgoing cash flows in relation to the assets and liabilities subject to the volatility adjustment;

(b) where the disapplication of the volatility adjustment would result in the undertaking failing to meet the solvency capital requirement, an analysis of the measures the undertaking could apply to re-establish the level of own funds covering the solvency capital requirement or reduce its risk profile to restore compliance with the solvency capital requirement;

(c) the undertaking’s written policy on risk management;

(d) an assessment of the undertaking’s compliance with the capital requirements specified in Sections 4 and 5 of Chapter 6 of Title 1 of the Solvency 2 Directive—

(i) when the volatility adjustment is applied; and

(ii) when the volatility adjustment is not applied.

Additional process: applications from groups and applications to more than one supervisory authority

40.—(1) Where the PRA receives an application referred to in the first column of Table 2, the PRA must follow the additional procedural requirements specified in the second column of Table 2.

Table 2

Application	Additional procedural requirements
An application by a parent undertaking for permission for a subsidiary undertaking to be subject to national laws implementing Articles 238 and 239 of the Solvency 2 Directive(3).	Schedule 4 applies.
A group application.	Schedule 5 applies.
An application by a third-country insurance undertaking under regulation 50 (approval of third-country insurance undertakings in more than one EEA State).	Where the PRA grants an approval and the application states that the PRA is to be the solvency supervisor, the PRA must notify the supervisory authorities referred to in regulation 50(2) of the date on which the approval is to take effect.
	Where the PRA grants approval and the application states that another supervisory authority is to be the solvency supervisor, the approval must take effect on the date on which the solvency supervisor is to supervise the solvency of the entire business of the undertaking’s branches (“the relevant date”) or, if later, the date on which the PRA is notified of the relevant date.
	“Solvency supervisor” has the meaning given in regulation 50(11).

(1)

See Article 231 of the Solvency 2 Directive.

(2)

See Article 233(5) of the Solvency 2 Directive.

(3)

Referred to in Articles 236(e) and 237 of the Solvency 2 Directive.