1
Introduction
1.1
This supervisory statement applies to all UK Solvency II firms, including in the context of provisions relating to Solvency II groups, mutuals, third-country branches, and to the Society of Lloyds, its members and managing agents.
- 31/12/2024
1.2
The PRA intends to ensure a consistent and clear communication of its expectations to enable firms and the PRA to make judgements which advance the PRA’s objectives.
- 30/09/2019
1.3
This statement sets out the PRA’s expectations of firms in relation to:
- the use of subordinated guarantees in connection with capital instruments issued by a company, whereby the payment of coupons and repayment of principal are guaranteed by a firm (the guarantor);
- how subordinated guarantees should not undermine the quality of capital held by firms to meet capital requirements (this expectation applies regardless of both the motivation for using a subordinated guarantee and the structure in which a guarantee is used); and
- how the guarantor’s regulatory capital position should be reported if the liability created by the guarantee serves to undermine the guarantor’s quality of capital.
- 30/09/2019
1.4
[Deleted]
- 30/09/2019
1.5
[Deleted]
- 30/09/2019
Actions expected of firms [Deleted]
1.6
[Deleted]
- 30/09/2019
1.7
[Deleted]
- 30/09/2019
Other considerations of scope
1.8
This statement relates only to structures where guarantees are being used to facilitate obtaining finance. The statement is written without prejudice to any other rules of the PRA Rulebook.
- 30/09/2019
1.9
For guarantees outside the scope of this statement and to which firms may be party, firms should still consider whether those guarantees serve to undermine the quality of their capital and discuss these with their usual supervisory contact as appropriate.
- 30/09/2019