Following a period of consultation, PRA has published a policy statement and supervisory statement that are relevant to all parties who wish to apply to PRA for, or have obtained authorisation as, an insurance special purpose vehicle (ISPV). It is also relevant to insurers and reinsurers seeking to use UK insurance special purpose vehicles (ISPVs) as risk mitigation in accordance with Solvency 2.
The statements set out PRA’s final approach and expectations in relation to the authorisation and supervision of ISPVs. The supervisory statement explains that Chapters 2 to 4 should be read in conjunction with the other materials including FCA’s policy statement on authorising and supervising ISPVs, Solvency 2, the Risk Transformation Regulations 2017 and FSMA.
The rules will be made and the supervisory statement formally adopted once the Risk Transformation Regulations 2017 have passed through parliament. The statements will be updated once this has occurred.