SS36/15 – Solvency II: life insurance product reporting codes

1.1

This supervisory statement is addressed to all UK insurance firms within the scope of Solvency II, and to the Society of Lloyd’s, that carry out life insurance business or have annuities stemming from non-life insurance business. Amendments to this statement since its publication in August 2015 are set out in the Annex.

1.2

The Solvency II supervisory reporting Implementing Technical Standards expects firms to use a defined list of product codes where attributed by the supervisory authority in the instructions to the template S.14.01.01 Life Obligations Analysis (S.14.01).

2.1

This supervisory statement sets out how the Prudential Regulation Authority (PRA) expects firms to submit information in annual reporting QRT S.14.01 using life product reporting codes. The Appendix lists the codes which the PRA expects firms to use.

2.2

In these product codes the third digit of the code is used to distinguish varieties of the same product. This separates conventional and unitised with-profit, unit-linked and index-linked as well as retaining data for industrial branch business.

2.3

Miscellaneous codes have only been assigned for protection business where there are minor products that do not fit into the named codes. A firm may use code 624 (miscellaneous protection non-profit) for any non-profit protection business if the amount of that business is not material. For the other main categories the product codes are intended to be sufficiently generic to cover all the products within that main category.

3.1

To achieve consistency of reporting between firms the PRA sets out in this section how it expects firms to interpret the instructions to the template S.14.01.

3.2

Where firms show the number of contracts in C0040 and C0050 the PRA expects firms to count multiple policies issued as part of the same premium, identifiable increments and rider benefits as being a single contract. Where firms report unbundled products across multiple rows and using different Product ID codes the Implementing Technical Standards (ITS) instructions for C0040 and C0050 are directly applicable.

3.3

Deleted.

3.4

For products which are reported with a ‘collective’ classification in C0100 the number of contracts to be reported in C0040 and C0050 is the number of members of the scheme where this is known to the firm.

3.5

Where a product has been written in both single life and joint life form the product classification in C0100 is ‘5 – other’.

3.6

Where at least one version of a product is available to new policyholders it should be shown in C0130 as ‘1’. C0130 is ‘2’ for run-off which includes products only available as new business due to options. The PRA does not expect firms to report at a lower level of granularity than the product codes. This will avoid the need for firms to seek historic information on product brand names.

3.7

Where premiums cease for a regular premium product the contract C0140 should continue to be reported as ‘1 – Regular premiums’. Where a product allows a flexible combination of regular and single premiums C0140 should be reported as ‘4 - Other’.

3.8

The PRA expects that the first three characters of the homogeneous risk group in C0170 and C0230 will be one of the three digit codes in the Appendix. The PRA expects that the fourth character of the homogeneous risk group will be D for direct business or R for reinsurance accepted. Homogeneous risk groups should only cover a single product code as indicated by the first three characters in C0170 and C0230.

3.9

Firms should use an approximation to apportion between product codes where parts of the technical provisions are calculated for a combination of products (eg with-profits guarantee costs) or if there is uncertainty as to which product code applies.

3.10

The PRA does not expect that the guidance in this SS on the reporting of homogeneous risk groups would impact the calculation of the Transitional Measures on Technical Provisions.

List of life insurance product reporting codes

This appendix sets out how the PRA expects firms to derive the data item ‘product ID code’ C0010 in template S.14.01 as a 3 character string.

Notes on product categories

Whole life and endowment – regular premium business only – includes policies made ‘paid-up’ – excludes single premium bonds which are technically whole of life.

Single premium bond – includes ‘investment bond’ and ‘with-profits bond’.

Individual defined contribution pensions – pensions savings before retirement, excludes deferred annuity buyouts, but contract may be written as deferred annuity with-profits, endowment with-profits, UWP or UL. Individual means there is no employer involvement.

Workplace defined contribution pensions – covers ‘group pensions’ where the group is the employer and the insurer has a separate record for each employee covered, which may include employer contributions. The firm calculates liabilities at member level.

Corporate pensions – covers trust based pension arrangements where the insurer does not hold separate records for individual employees. The insurer normally just provides investment services, and the records of benefits are maintained by the trustees or another party. The firm calculates liabilities at scheme level.

Miscellaneous protection – these categories are for types of protection which do not fit within the named protection categories, e.g. long term care.

Bulk purchase annuity – this is for annuity liabilities arising from occupational pension schemes including where members hold individual policies after winding up of the scheme.

All reinsurance refers to reinsurance accepted. Reinsurance ceded is not reported in S.14.01.

Abbreviations