The
Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations
2019
These Regulations are made in exercise of the powers in section
8(1) of the European Union (Withdrawal) Act 2018 (c. 16) and
section 2(2) of the 1972 Act to address the deficiencies in
retained EU law to operate effectively and other deficiencies
arising from the withdrawal of the United Kingdom from the
European Union.
The Solvency 2 Regulations is a harmonised prudential framework
for insurance and reinsurance firms in the EU. Prudential
regulation is aimed at ensuring financial services firms are well
managed and able to withstand financial shocks so that the
services they provide to businesses and consumers are safe and
reliable. Solvency 2 is designed to provide a high level of
policy-holder protection by requiring firms to provide a
market-consistent valuation of their assets and liabilities,
understand the risks they are exposed to, and to hold capital
that is sufficient to absorb shocks. Solvency 2 is a
risk-sensitive regime in that the capital a firm must hold is
dependent on the nature and level of risk a firm is exposed
to.
Accordingly, these arrangements represent a deficiency in
retained EU law (see section 8(2)(b) of the European Union
(Withdrawal) Act 2018 (c. 16)).
In these Regulations:
— Part 1 makes provision as to citation and commencement;
— Part 2 confers power on the Treasury to make regulations in
respect of matters previously made under Directive 2009/138/EC 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 2);
— Part 3 transfer the power to make technical standards to the
PRA;
— Part 4 amends the Financial Services and Markets Act 2000 (c.
8);
— Part 5 amends the Solvency 2 Regulations 2015 (S.I.
2015/575);
— Part 6 amends Commission Delegated Regulation (EU) 2015/35 of
10 October 2014 supplementing Directive 2009/138/EC of the
European Parliament and of the Council on the taking-up and
pursuit of the business of Insurance and Reinsurance (Solvency
2);
— Part 7 makes transitional provision in relation to the approval
of temporary models
