Undertakings in Difficulty Non-Compliance with the SCR
Application provision
1.1 Unless otherwise stated, this Part applies to:
- (1) a UK Solvency II firm; and
- (2) in accordance with Insurance General Application 3, the Society, as modified by 6.
3.1
01/01/2016
A firm must:
- (1) immediately inform the PRA as soon as it observes that the SCR is no longer complied with, or where there is a risk of non-compliance within the next three months;
- (2) within two months from the observation of non-compliance with the SCR, submit a realistic recovery plan for approval by the PRA; and
- (3) take the measures necessary to achieve, within six months (or such longer period as the PRA may determine) from the observation of non-compliance with the SCR, the re-establishment of the level of eligible own funds covering the SCR or the reduction of its risk profile to ensure compliance with the SCR.
3.2
31/12/2020
The changes to this rule are effective from 23:00 on 31/12/2020.
If the PRA has extended the period referred to in 3.1(3), by reason of the declaration;
- (1) before IP completion day by EIOPA; or
- (2) on or after IP completion day by the PRA pursuant to regulation 4A of the Solvency 2 Regulations,
of exceptional adverse situations affecting the firm, the firm must submit a progress report to the PRA every three months setting out the measures taken and the progress made to re-establish the level of eligible own funds covering the SCR or to reduce its risk profile to ensure compliance with the SCR.