Prudential Regulation Authority Rulebook

1.1

This supervisory statement sets out the Prudential Regulation Authority’s (PRA’s) approach to schemes of arrangement proposed by PRA-authorised insurers under Part 26 of the Companies Act 2006.

1.2

In this statement, the PRA:

• provides responses to the feedback received on its consultation on the draft statement in PRA consultation paper 6/13 (the CP) – this statement should be read with that document;
• clarifies its view of schemes of arrangement;
• explains its role in assessing schemes of arrangement; and
• gives supplementary information on interaction with the Financial Conduct Authority (FCA) as well as the PRA’s complementary supervisory statement on capital extractions.

1.3

This statement explains some of the factors which the PRA will take into account when judging whether, in promoting a scheme, an insurer is acting in a manner consistent with the PRA’s statutory objectives. Specifically, the PRA seeks to ensure that insurers are able (with a high degree of likelihood) to meet claims from policyholders as they fall due and that where firms wish to exit the market they do so in a way which takes proper account of the need to provide an acceptable degree of continuity of cover for policyholders.

1.4

This supervisory statement expands on the PRA’s general approach as set out in its insurance approach document¹ and is designed to help advance both the PRA’s general objective of promoting the safety and soundness of the firms it regulates and its insurance objective of contributing to the securing of an appropriate degree of protection for policyholders.