The Prudential Regulatory Authority (PRA) has published 36 questions and answers (Q&As) following on from its Solvency II industry briefing. Answers have been provided to a number of questions including:
. proportionality (Qs 1 – 8);
. the PRA's supervisory statement 4/13 (Qs 9 – 21);
. the standard formula (Qs 22 – 24);
. early warning indicators (Qs 25 – 27);
. trilogue discussions Q4 2012 (Qs 28 – 32); and
. open Q&A (Qs 33 - 36).
In Q&As 18 – 21 the PRA sets out the reporting expectations that firms:
. in scope for reporting during the probationary period will be formally notified in January 2014;
· will be consulted on national specific templates for reporting;
· will be expected to submit interim templates in XBRL; and
· can submit incomplete returns during the preparatory stage, but the gaps will be assessed for significance by PRA.
The "Open Q&A" cover:
. whether Solvency II goes far enough to address the potential for bad behaviour and cultures in insurance firms;
. the PRA's approach for third country branches under Solvency II;
. whether any shortfalls in regulatory capital can be addressed through the provisions of Pillar 2; and
. what PRA's advice is for firms that are not able to reach their supervisor or do not have a named supervisor.