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A new Remuneration Policy Statement template for Solvency II firms

  • United Kingdom
  • Employment law
  • Financial institutions

17-05-2019

The PRA has published a new remuneration reporting template for significant insurers (Solvency II insurance firms Categories 1 and 2). The new template must be submitted with a firm’s completed Remuneration Policy Statement (RPS) by 31 July 2019.

Compliance with Article 275: the template

Significant insurers must comply with the Solvency II remuneration requirements contained in Article 275 of the Solvency II Regulation and additionally with the European Insurance and Occupational Pensions Authority guidelines on system of governance.

The PRA published policy statement PS22/16 and updated supervisory statement SS10/16 to assist significant firms with understanding and complying with the remuneration requirements. Smaller firms can use the supervisory statement when reviewing their remuneration policies and practices against the Solvency II Regulation requirements.

To enable firms to demonstrate how their remuneration policies practices and procedures are meeting the requirements in the Solvency II Regulation and the expectations in the supervisory statement, the PRA designed a RPS template for significant firms to use. The template meets the PRA’s expectation of the level of detail that should be included when asked to demonstrate compliance.

The PRA has now published a new non compulsory RPS template. Firms are free to document their remuneration practices in a different way but must take care to ensure that all required information is provided in a clear and structured way. Clearly, completing the template will ensure that firms more readily meet the requirements but firms should not treat compliance as a tick box exercise. Firms must consider and apply the Solvency II requirements carefully.

Does the template apply to smaller firms?

The PRA expects all Solvency II firms to comply with the remuneration requirements although the supervisory statement and template are aimed at significant firms. However, as smaller firms should comply appropriately with the Solvency II Regulation, the template may be used as a useful aid to compliance.

You can access the template here.

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