Risk Management and Internal Control | Prudential Regulation Authority Handbook & Rulebook
Prudential Regulation Authority Rulebook

Prudential Regulation Authority Rulebook

Part

Group Supervision

Chapter

Risk Management and Internal Control

Printed on: 08/07/2025

Rulebook at: 10/12/2025


17

Risk Management and Internal Control

17.1

  1. (1) Where 2.1(1) or 2.1(2) applies, the following requirements apply with any necessary changes at the level of the group:
    1. (1a) Conditions Governing Business 1A;
    2. (a) Conditions Governing Business 2.2 to 2.6;
    3. (a1) Conditions Governing Business 2A.1 to 2A.6;
    4. (b) Conditions Governing Business 3;
    5. (b1) Conditions Governing Business 3A;
    6. (c) Conditions Governing Business 4;
    7. (c1) Conditions Governing Business 4A;
    8. (d) Conditions Governing Business 5;
    9. (e) Conditions Governing Business 6;
    10. (f) Conditions Governing Business 7;
    11. (f1) Conditions Governing Business 11A to 11F;
    12. (g) Fitness and Propriety 2.1 to 2.3, 4.1, 4.3 and 4.4;
    13. (h) Allocation of Responsibilities 4; and
    14. (i) Key Function Holder – Notifications 2 to 6, in accordance with 17.4.
  2. (2) Without prejudice to (1), the effective system of governance and reporting procedures must be implemented consistently in all the undertakings included in the scope of group supervision under 2.2(1) and 2.2(2) so that the effective system of governance and reporting procedures can be controlled at the level of the group.
  3. (3) Without prejudice to (1), the internal control system must include at least the following:
    1. (a) adequate mechanisms as regards group solvency to identify and measure all material risks incurred and to appropriately relate eligible own funds to risks; and
    2. (b) sound reporting and accounting procedures to monitor and manage the intra-group transactions and the risk concentration.
  • 31/12/2024

17.2

  1. (1) Where 2.1(1) or 2.1(2) applies, a participating Solvency II undertaking that is a firm, or if there is none, the UK holding company or the relevant insurance group undertakings, must undertake at the level of the group the ORSA assessment required by Conditions Governing Business 3.8 to 3.12.
  2. (2) Where the calculation of the solvency at the level of the group is carried out in accordance with method 1, the participating Solvency II undertaking, the UK holding company or the relevant insurance group undertakings (as appropriate) must provide to the group supervisor a proper understanding of the difference between the sum of the SCR of all the related Solvency II undertakings in the group and the consolidated SCR of the group.
  3. (3) Where the participating Solvency II undertaking, the UK holding company or the relevant insurance group undertakings (as appropriate) so decide, and subject to the agreement of the group supervisor, they may undertake any assessments required by Conditions Governing Business 3.8 to 3.12 at the level of the group and at the level of any subsidiary undertaking in the group at the same time, and may produce a single document covering all the assessments to satisfy the requirement to provide an ORSA report in Conditions Governing Business 3.11 and 3.12.
  4. (4) Where the group exercises the option provided in (3), it must submit the ORSA report to all supervisory authorities concerned at the same time.
  5. (5) The exercise of the option provided in (3) does not exempt the subsidiary undertakings concerned from the obligation to ensure that the requirements of Conditions Governing Business 3.8 to 3.12 are met.

[Note: Art. 246(1) to (4) of the Solvency II Directive]

  • 31/12/2024

17.3

Reporting 2.1 to 2.5B, 2.13 and the relevant provisions of Chapter 2A of the Reporting Part apply, with any necessary changes, to reporting information on a group to the PRA.

[Note: Art. 254(2) of the Solvency II Directive]

  • 31/12/2024

17.4

[Deleted.]

  • 10/12/2018