CP19/23 – Review of Solvency II: Reform of the Matching Adjustment
What are the main takeaways?
In September, the Prudential Regulation Authority published its Consultation Paper 19/23 (CP19/23), covering the second set of proposed reforms to Solvency II in the UK relating to the matching adjustment (MA). The CP forms part of the wider ongoing review of the UK’s insurance regulatory environment led by the government, particularly His Majesty’s Treasury (HMT). This briefing paper addresses the following proposed changes in CP19/23:
- Investment flexibility
- Liability eligibility
- Credit ratings under the MA
- MA permissions, breaches, and consequential rule changes
- Attestation requirements
- Assumptions underlying the MA
- Matching Adjustment Asset and Liability Information Return (MALIR)
- Notching
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CP19/23 – Review of Solvency II: Reform of the Matching Adjustment
Prudential Regulation Authority's CP19/23 proposes a substantial package of reforms to the matching adjustment, changes whose aggregate impact will take time to become clear.