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Glossary

The Rulebook Glossary contains defined terms used in more than one Part across the PRA Rulebook.

The full Glossary can be downloaded as a PDF or printed using the icons to the right.

Term Definition Legal instruments for this definition

safeguarding and administering investments

03/08/2015

means the regulated activity, specified in article 40 of the Regulated Activities Order (Safeguarding and administering investments).

safeguarding and administration of assets (without arranging)

03/08/2015

that part of safeguarding and administering investments which consists of both:

(a) the safeguarding of assets belonging to another; and

(b) the administration of those assets.

SCR

01/01/2016

means the solvency capital requirement calculated in accordance with the SCR Rules.

Additional Notes

[Note: Art. 100 of the Solvency II Directive]

SCR Rules

01/01/2016

means the PRA rules contained in the Solvency Capital Requirement – General Provisions Part of the PRA Rulebook, the Solvency Capital Requirement – Standard Formula Part of the PRA Rulebook and the Solvency Capital Requirement – Internal Models Part of the PRA Rulebook.

Second Life Directive

19/06/2014

means the Council Directive of 8 November 1990 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 79/267/EEC (No 90/619/EEC).

Second Non-Life Directive

02/04/2015

means the Council Directive of 22 June 1988 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (No 88/357/EEC).

security

01/01/2016

(in the Solvency II Firms Sector of the PRA Rulebook) has the meaning specified in article 3(1) of the Regulated Activities Order.

senior insurance management function holder

07/03/2016

means any person who is responsible for discharging a senior insurance management function.

senior management

01/02/2014

means those natural persons who exercise executive functions within a firm and who are responsible, and accountable to the management body, for the day-to-day management of the firm.

senior management regime

10/12/2018

means the requirements of the regulatory system, to the extent applicable to authorised persons, insofar as they relate to approved persons performing PRA senior management functions and relevant senior management functions.

senior personnel

02/04/2015

means those persons who effectively direct the business of the firm, which could include a firm’s governing body and other persons who effectively direct the business of the firm.

SFCR

01/01/2016

means the solvency and financial condition report, as detailed in Reporting 3 to 6.

share

03/07/2015

means the investment specified in article 76 of the Regulated Activities Order.

ships

03/07/2015

means the class of contract of insurance specified in paragraph 6 of Part I of Schedule 1 to the Regulated Activities Order.

short-term deposit

01/01/2016

means a deposit which may be withdrawn at the discretion of the lender without penalty or loss of accrued interest by giving notice of withdrawal of one month or less.

significant deviation from relevant assumptions

01/01/2016

means a significant deviation from the assumptions underlying the matching adjustment or the volatility adjustment or the transitional measures referred to in Articles 308c and 308d of the Solvency II Directive.

significant system of governance deviation

01/01/2016

means the determination by the PRA of a significant deviation by a UK Solvency II firm, or a group (as appropriate), from the system of governance requirements set out in Conditions Governing Business 2.2 to 7 (including pursuant to Group Supervision 17.1(1) where appropriate).

skilled person

19/06/2014

means a person appointed to:

(1) make and deliver to the PRA a report as provided for by section 166 of FSMA (Reports by skilled persons); or

(2) collect or update information as required by the PRA under section 166A of FSMA (Appointment of skilled person to collect and update information).

small non-directive insurer

01/01/2016

means a non-directive insurer other than a large non-directive insurer.

small run-off firm

03/07/2017

means a firm:

(1) whose Part 4A permission for effecting contracts of insurance has been cancelled as at the date on which the firm becomes a small run-off firm;

(2) which has not effected any new contracts of insurance in the 12 months before the date on which the firm becomes a small run-off firm;

(3) which has not participated as a transferee in a transfer of insurance business under Part VII of FSMA in the 12 months before the date on which the firm becomes a small run-off firm; and

(4) the value of whose technical provisions is less than £25 million, as reported in each of the firm’s two most recent annual reports and accounts published before the date on which it becomes a small run-off firm.

A firm remains a small run-off firm unless, after the date on which it becomes a small run-off firm, it:

(1) has a Part 4A permission for effecting contracts of insurance;

(2) effects a new contract of insurance; or 

(3) participates as a transferee in a transfer of insurance business under Part VII of FSMA.

Society

19/06/2014

means the society incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.

Solvency 2 Regulations

01/01/2016

means the Solvency 2 Regulations 2015 (SI 2015/575).

solvency deficit

01/01/2016

means the amount (if any) by which total capital after deductions fall short of individual capital resources requirements.

Solvency I Directive

01/01/2016

means each of:

(1) the Consolidated Life Directive;

(2) the First Non-Life Directive;

(3) the Second Non-Life Directive;

(4) the Third Non-Life Directive; and

(5) the Reinsurance Directive.

Solvency I firm

01/01/2016

means a firm that immediately before the Solvency II implementation date was an insurer that fell within the scope of a Solvency I Directive.

Solvency II Directive

01/01/2016

means the Directive of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (No 2009/138/EC).

Solvency II EEA implementing measures

01/01/2016

means any measures implementing the Solvency II Directive in an EEA State other than the UK.

Solvency II implementation date

01/01/2016

means 1 January 2016.

Solvency II Regulations

01/01/2016

means the directly applicable EU Regulations adopted in accordance with the Solvency II Directive.

Solvency II special purpose vehicle

08/12/2017

means an undertaking, whether incorporated or not, other than a Solvency II undertaking, which has received authorisation in accordance with Article 211(1) or (3) of the Solvency II Directive and which: 

(1) assumes risks from Solvency II undertakings; and 

(2) fully funds its exposures to such risks through the proceeds of a debt issuance or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the undertaking’s obligations to the Solvency II undertaking in respect of the risks referred to in (1).

Additional Notes

[Note: Art. 13(26) of the Solvency II Directive]

Solvency II undertaking

01/01/2016

means:

(1) an undertaking authorised in accordance with Solvency II EEA implementing measures transposing Article 14 of the Solvency II Directive; or

(2) a UK Solvency II firm.

specified investment

03/08/2015

has the meaning given in the PRA Handbook as at 31 July 2015.

spread bet

03/08/2015

has the meaning given in the PRA Handbook as at 31 July 2015.

spread risk

01/01/2016

means the risk that a spread (that is, the difference in price or yield) between two variables will change.

stakeholder pension scheme

03/08/2015

has the meaning provided in Article 3(1) of the Regulated Activities Order.

standard formula

01/01/2016

means a methodology used by a firm to calculate its SCR according to the rules in the Solvency Capital Requirement – Standard Formula Part of the PRA Rulebook.

standard formula significant risk profile deviation

01/01/2016

means the determination by the PRA of a significant deviation in the risk profile of a UK Solvency II firm, or a group (as appropriate), from the assumptions underlying the SCR (or group SCR, as appropriate) in circumstances where the firm’s SCR (or the group’s group SCR, as appropriate) is calculated using the standard formula.

standing data

02/04/2015

means the information relating to a firm held by the PRA on the following matters:

(1) Communications with a firm:

(a) name;

(b) trading name(s);

(c) registered office;

(d) principal place of business;

(e) website address;

(f) complaints contact and complaints officer; and

(g) the name and email address of the primary compliance contact.

(2) Other information about a firm:

(a) name and address of the firm’s auditor;

(b) accounting reference date; and

(c) locum.

Statement of Principle

19/06/2014

means one of the Statements of Principle issued by the PRA under section 64(1A) of FSMA (Conduct: statements and codes) with respect to the conduct of approved persons.

statement of responsibilities

10/12/2018

means a statement of the aspects of the affairs of an authorised person for which it is intended that a person is (or will be) responsible including information required under section 60(2A) or section 62A of FSMA.

statement of responsibilities form

10/12/2018

(1) for a UK Solvency II firm, the Society, a managing agent, a UK ISPV and a third country branch undertaking (other than a UK-deposit insurer or a Swiss general insurer), means the form to be completed by a firm containing:

(a) the information referred to in Insurance – Allocation of Responsibilities 5.1(3);
(b) in respect of Insurance – Senior Managers Regime - Applications and Notifications 2.7, 4A.1, 5.3 and 6.3(1), the information required by section 60(2A) of FSMA; and
(c) in respect of Insurance – Allocation of Responsibilities 5.5 and for PRA senior management function holders only, the information required by section 60(2A) of FSMA

(2) for a large non-directive insurer, means the form to be completed by a firm containing:

(a) the information referred to in Large Non-Solvency II Firms – Allocation of Responsibilities 5.1(3);
(b) in respect of Large Non-Solvency II Firms – Senior Managers Regime – Applications and Notifications 2.7, 4A.1, 5.3 and 6.3(1), the information required by section 60(2A) of FSMA; and
(c) in respect of Large Non-Solvency II Firms – Allocation of Responsibilities 5.5 and for PRA senior management function holders only, the information required by section 60(2A) of FSMA.

(3) for a small non-directive insurer, means the form to be completed by a firm containing:

(a) the information referred to in Non-Solvency II Firms – Fitness and Propriety 4.1(2); and
(b) in respect of Non-Solvency II Firms – Senior Managers Regime - Applications and Notifications 2.7, 4A.1, 5.3 and 6.3(1), the information required by section 60(2A) of FSMA.

stock lending

01/01/2016

means the disposal of a designated investment subject to an obligation or right to reacquire the same or a similar designated investment from the same counterparty.

sub-consolidated basis

01/01/2019

This term is defined externally, please refer to -

Article 4(1)(49) CRR

sub-consolidation group

01/01/2019

means the undertakings included in the scope of consolidation as a result of a requirement imposed on a ring-fenced body under Article 11(5) of CRR.

subsidiary

01/01/2016

This term is defined externally, please refer to -

s420(2) FSMA

subsidiary undertaking

12/10/2016

means an undertaking of which another undertaking is its parent undertaking.

supervisory authority

01/01/2016

means a national authority or the national authorities empowered by law or regulation of an EEA State to supervise Solvency II undertakings for the purposes of the Solvency II Directive, including the PRA and FCA.

Additional Notes

[Note: Art. 13(10) of the Solvency II Directive]

supervisory function

02/04/2015

means any function within a firm that is responsible for the supervision of its senior personnel.

Supervisory Reporting ITS

01/10/2018

means Commission Implementing Regulation (EU) No 680/2014 of 16 April 2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council, as amended from time to time.

support arrangements

01/01/2016

means arrangements under which the financial resources available to a with-profits fund include (or are intended in particular circumstances to include) financial resources from outside that with-profits fund.

surplus assets

01/01/2016

has the meaning given in Friendly Society – Asset Valuation 5.3.

surrender value

01/01/2016

means:

(1) where the contract is a contract of life assurance or a contract for an annuity, the amount (including a nil amount) payable by the firm or other body issuing the contract on surrender of the policy;

(2) where the contract is a personal pension scheme or a stakeholder pension scheme, the amount payable on the transfer of the investor’s accrued rights under that contract to another personal pension scheme or a stakeholder pension scheme; or

(3) where the contract is for any other matter, the amount payable by the firm on the surrender of the policy.

Swiss general insurance company

01/01/2016

has the meaning given in article 1(2) of the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 2001/2507).

Swiss general insurer

01/01/2016

means a Swiss general insurance company which has a Part 4A permission to effect contracts of insurance or carry out contracts of insurance of a kind which is subject to the Swiss Treaty Agreement.

Swiss Treaty Agreement

01/01/2016

means the agreement of 10 October 1989 between the European Economic Community and the Swiss Confederation on direct insurance other than life insurance, approved on behalf of the European Economic Community by the Council Decision of 20 June 1991 (No 91/370/EEC).

syndicate

19/06/2014

means one or more persons, to whom a particular syndicate number has been assigned by or under the authority of the Council, carrying out contracts of insurance or effecting contracts of insurance written at Lloyd's.

syndicate assets

01/01/2016

means the assets managed by or at the direction of a managing agent in respect of insurance business carried on through a syndicate and overseas business regulatory deposits funded from those assets.

syndicate year

01/01/2016

means a year of account of a syndicate.