PRA statement on the recalculation of the Transitional Measure on Technical Provisions (TMTP) as at year-end 2023

The Bank of England’s Prudential Regulation Authority (PRA) has published a statement addressed at insurance and reinsurance undertakings as regards the recalculation of the transitional measure on technical provisions (TMTP) which permits firms to recalculate and adjust their technical provisions on Solvency II Pillar 2 liabilities following the implementation of Solvency II over a period of time so as to reduce the overall impact of Solvency II requirements in any one year.
Although generally permitted only every other year and in line with the PRA’s Supervisory Statement on the „Maintenance of the ‘transitional measure on technical provisions’ under Solvency II“ (SS6/16), the PRA acknowledges that firms‘ risk profiles may have changed warranting a recalculation of the TMTP. As a consequence, the PRA now permits applications for recalculating the TMTP as of December 31, 2023. In this context, the PRA notes that the application must be filed BEFORE conducting the recalculation. Firms should also refrain from including details of the proposed recalculation in their applications.
In an effort to streamline the application process, the PRA requests firms to NOT file the application form and simply submit an application request via e-mail which shall be sent to S2submissions@bankofengland.co.uk. The application shall state the following in the subject bar – as quoted:
[Firm name and FRN] SOLVENCY II REGULATIONS 2015; REGULATION NO: 54(1)(b) – RECALCULATION OF THE TRANSITIONAL MEASURE ON TECHNICAL PROVISIONS (“TMTP”) – 31 DECEMBER 2023
Furthermore, the following phrase should be included in the content part of the e-mail – again as quoted:
Further to the PRA email communication [Name of firm] hereby applies to the PRA for permission to recalculate the transitional measure on technical provisions as at 31 December 2023.
Finally, the PRA notes that – although their is an ongoing consultation on changes to the TMTP – this will not affect the current recalculations.