Preparations for Solvent Exit

1.1

Subject to 1.2, this Part applies to:

1. (1) a UK Solvency II firm;
2. (2) a non-directive insurer; and
3. (3) in accordance with Insurance General Application 3, the Society.

1.2

Passive run-off firms are excluded from 1.1.

1.3

In this Part, the following definitions shall apply:

passive run-off firm

means a firm:

1. (1) which has ceased effecting contracts of insurance;
2. (2) whose Part 4A permission for effecting contracts of insurance has been cancelled; and
3. (3) which is not a run-off acquirer.

run-off acquirer

means a firm which acquires and carries out contracts of insurance in run-off.

solvent exit

means the process through which a firm ceases its insurance business while remaining solvent.

solvent exit analysis

means a document setting out a firm’s preparations for solvent exit.

2.1

A firm must:

1. (1) prepare for solvent exit so that, if the need arises, it can effect a solvent exit in an orderly manner;
2. (2) produce a solvent exit analysis and update it whenever a material change has taken place that may affect its preparations for a solvent exit, and at least once every three years;
3. (3) where it is a UK Solvency II firm which is part of a group, take into account in its solvent exit analysis the implications of, and any risk arising from, being part of the group; and
4. (4) be able to provide to the PRA on request the current version of its solvent exit analysis.