PRA consults on dealing with insurers in financial difficulty

The PRA has published its consultation paper (CP3/23) and appendices seeking consultation on its proposed rules and policy changes introduced by the Financial Service and Markets Bill 2022-23 (FSM Bill) to the Financial Service and Markets Act 2000 (FSMA) in respect of insurers in financial difficulties.

The consultation paper proposes:

• new policyholder protection rules (amending the Policyholder Protection Part of the PRA Rulebook (PPP)) concerning how the Financial Services Compensation Scheme (FSCS) should operate in connection with a write-down and consequential amendments to the FSCS Statement of Policy (SoP);
• new rules concerning the notification of affected persons; and
• a new SoP setting out the PRA’s approach and expectations in relation to write-down applications and the appointment of write down managers.

The consultation closes on Friday, 31 March 2023.