Guidance

SoP – The Prudential Regulation Authority's approach to insurance business transfers

Chapter

Introduction

Printed on: 18/01/2025

Rulebook at: 12/01/2022

1

Introduction

1.1

The purpose of this statement of policy is to set out the approach and expectations of the Prudential Regulation Authority (PRA) in relation to transfers of insurance business under Part VII of the Financial Services and Markets Act 2000 (FSMA), insurance business transfers from Switzerland, and friendly society transfer of engagements and amalgamations. It is relevant to insurance firms and friendly societies authorised by the PRA.

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1.2

While this statement sets out the PRA’s expectations in relation to insurance business transfers, the PRA will consult with the Financial Conduct Authority (FCA) in advance of making certain decisions in respect of a transfer and will seek to avoid introducing, inadvertently, incompatible requirements.[1] The FCA has also set out its own approach to and expectations in respect of insurance business transfers in SUP 18 of the FCA Handbook and FCA Final Guidance (FG) 18/4: The FCA’s approach to the review of Part VII insurance business transfers.[2] 

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1.3

Chapter 2 is aimed at any firm, or one or more underwriting members of the Society of Lloyd’s, or one or more persons who have ceased to be such a member, proposing to make an application to transfer the whole or part of its business by an insurance business transfer scheme under section 107 of the FSMA or to accept such a transfer. Chapter 2 is also aimed at the independent expert approved by the PRA to make the scheme report under section 109 of FSMA.

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1.4

Chapter 3 is aimed at any firm proposing to accept transfers of insurance business from Switzerland.

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1.5

Chapter 4 is aimed at any friendly societies proposing to amalgamate under section 85 of the Friendly Societies Act 1992, to any friendly society proposing to transfer engagements under section 86 of that Act to another person or body of persons and to any person or body of persons (whether or not a friendly society) proposing to accept such a transfer.

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1.6

Chapter 2 should be read in conjunction with Part VII of FSMA, all relevant secondary legislation[3] and the high level expectations outlined in ‘The Prudential Regulation Authority’s approach to insurance supervision’.[4] Chapter 3 should be read in conjunction with the Friendly Societies Act 1992 and ‘The Prudential Regulation Authority’s approach to insurance supervision’.[5]

  • 3. Including but not limited to, the Financial Services and Markets Act 2000 (Control of Business Transfers) (Requirements on Applications) Regulations 2001 (SI2001/3625), the Financial Services and Markets Act 2000 (Control of Transfers of Business Done at Lloyd’s) Order 2001 (SI 2001/3626), the amendments to FSMA made by the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (SI 2019/632) and, if relevant, the transitional provision in the Financial Services (Miscellaneous )(Amendment) (EU Exit) Regulations 2019 (SI 2019/710).
  • 4. The Prudential Regulation Authority’s approach to insurance supervision, October 2018: https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/approach/insurance-approach-2018.pdf
  • 5. Ibid, footnote 3.
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1.7

In this statement, reference to ‘the regulators’ means the PRA and the Financial Conduct Authority (FCA).

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