Insurance (Prudential Standards) (Class 3A Solvency Requirement) Amendment (No. 2) Rules 2022

Summary

This instrument amends the Insurance (Prudential Standards) (Class 3A Solvency Requirement) Rules 2011, which set out the enhanced capital requirement (ECR) methodology for Class 3A insurers. It inserts a new risk category and accompanying schedule into the existing solvency framework.

• Paragraph 6 amendment: Inserts a reference to 'IVF' after 'IVE' in subparagraph (1) and subparagraph (2)(a), incorporating the new schedule into the existing ECR calculation provisions.
• New Schedule IVF: Adds a new Schedule IVF entitled 'Schedule of Risk Exposure' after existing Schedule IVE, setting out an additional risk exposure component for the Class 3A solvency calculation.
• Publication requirement: Schedule IVF is published on the BMA website in accordance with section 6A(8) of the Insurance Act 1978.

The Rules are deemed to have come into operation retroactively from 1 July 2022, meaning affected insurers must apply the amended solvency requirement calculation for that period onward, including the new risk exposure schedule.

Key obligations

• Class 3A insurers must apply the amended enhanced capital requirement (ECR) calculation incorporating new Schedule IVF (Schedule of Risk Exposure) when determining their solvency requirement.
• Class 3A insurers must include the IVF risk category as referenced in amended subparagraphs 6(1) and 6(2)(a) in their ECR calculations from the operative date.

Applies to

Class 3A insurers

Deadlines

• 1 July 2022: Rules deemed to have come into operation (retroactive commencement date) from which the amended solvency requirement, including new Schedule IVF, applies.

Related documents

• This document is made under Insurance Act 1978
• This document amends Insurance (Prudential Standards) (Class 3A Solvency Requirement) Rules 2011