PRA updates on insurance branch supervision

The PRA has provided feedback on the responses received to its consultation on the PRA’s approach to the authorisation and supervision of insurance branches.

10 responses were received, which generally supported the plans to consolidate and clarify the PRA’s approach to insurance branches. Respondents did seek further clarification with regard to how the proposals would interact with the PRA’s secondary objectives. They also requested adjustments to specific proposals in favour of treatments that would be more flexible and proportionate.

In consideration of the responses, the PRA has replaced the term ‘policyholder’ with ‘insurance policyholder’ in SS44/15 and its draft Statement of Policy (SoP) to clarify that the PRA does not expect reinsurance claims of third-country branch undertakings to have priority over general creditors.

It has made further changes to its draft SoP to clarify that, when appropriate, the PRA will seek and consider the home supervisor’s views on the third-country branch during reviews of authorisation applications and in its ongoing supervision. The PRA has also made amendments and clarifications regarding its assessment of the home jurisdiction’s supervisory equivalence.

Harry Wells