1. Background to the Matching Adjustment -
“Where insurance and reinsurance undertakings hold bonds or other assets with similar cash flow characteristics to maturity, they are not exposed to the risk of changing spreads...more
As discussed in our previous updates, in June 2020 the UK government announced a wide-ranging review of the Solvency II framework in the UK, aimed at reforming the insurance regulatory framework inherited from the EU given...more
3/14/2024
/ Disclosure Requirements ,
EU ,
Final Rules ,
Financial Services and Markets Act ,
Insurance Industry ,
Jurisdictional Thresholds ,
Prudential Regulation Authority (PRA) ,
Reinsurance ,
Reporting Requirements ,
Solvency II ,
UK ,
Underwriting
Group supervision regulates the impact that members of a Solvency II group may have on a UK Solvency II insurer. The rules governing Solvency II groups are contained in the PRA Rulebook (Group Supervision), the Solvency 2...more
“The Standard Formula” host Rob Chaplin is joined in this episode by colleague Theo Charalambous as they map out the intricacies of the U.K.’s matching adjustment regime for insurers, which will soon be reformed. The...more
(Re)insurance is a global business. It is common for (re)insurance groups to operate in a range of jurisdictions via:
i. locally incorporated and authorised subsidiaries,
ii. local branches of third country...more
UK regulators have recently announced a number of reforms for banks and other financial institutions.
- On 23 November 2023, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) (together,...more
1/8/2024
/ Banking Sector ,
Capital Requirements Regulation (CRR) ,
Cryptocurrency ,
EU ,
Financial Conduct Authority (FCA) ,
Financial Institutions ,
Financial Regulatory Reform ,
Financial Services Industry ,
Hedge Funds ,
Holding Companies ,
Investment Firms ,
Investment Management ,
Limited Partnerships ,
New Guidance ,
Private Equity ,
Private Equity Funds ,
Prudential Regulation Authority (PRA) ,
Regulatory Agenda ,
Regulatory Reform ,
Regulatory Requirements ,
Remuneration ,
Sovereign Wealth Funds ,
UK
The primary function of an insurer is the assumption and management of insurance risk. Very commonly, this will involve an insurer passing (or ceding) risk to other (re)insurers or protection providers in the relevant market....more
Global M&A Activity Endures Headwinds in 2023 and Displays Resilience Going Into 2024 -
Despite market headwinds, dealmakers have looked to carveouts, spin-offs, joint ventures and other creative deal structures to engage...more
12/22/2023
/ Acquisitions ,
Antitrust Provisions ,
Banking Sector ,
Capital Markets ,
China ,
Climate Change ,
Commercial Real Estate Market ,
Competition ,
Controlling Stockholders ,
Corporate Governance ,
Cross-Border ,
EU ,
Exit Strategies ,
Financial Services Industry ,
Geopolitical Risks ,
Global Dealmaking ,
HKEx ,
Insurance Industry ,
Joint Venture ,
Merger Controls ,
Mergers ,
Private Equity ,
Regulatory Agenda ,
Risk Management ,
Securities ,
Short-Term Loans ,
Takeovers ,
Technology Sector ,
UK
Models that have historically been used by insurers to hedge risk were not designed to predict uncertain events such as natural disasters that may be exacerbated by climate change. This now leaves insurers overexposed to...more
“The Standard Formula” podcast continues its Back to Basics series — a deep dive into the Solvency II regime — discussing the regime’s provisions regarding third country branches and the cross-border provision of services. ...more
Own funds is the Solvency II term for the items that constitute a (re)insurer’s regulatory capital. These are principally balance sheet items, with limited allowance for off-balance sheet items.
Own funds are items that...more
On 16 November 2023, the UK Prudential Regulatory Authority (PRA) released draft measures to address perceived risks in the market for funded reinsurance, which is widely used as part of transactions that shift pension scheme...more
"The Standard Formula” host Robert Chaplin introduced the first in the podcast’s Back to Basics series, which will dissect the entirety of the Solvency II regime. In the series’ inaugural episode, Rob is joined by associate...more
As discussed in our November 2022 and July 2023 newsletters, the UK government is implementing a comprehensive set of proposals for regulation of financial services in the UK, including for insurers. This follows the UK’s...more
The EU’s Solvency II regime came into force in the UK on 1 January 2016, following many years of development in which the UK was deeply involved. In June 2020, post-Brexit, the government announced a wide-ranging review of...more
This edition of Skadden’s quarterly Insights looks at the latest trends in shareholder activism, the scrutiny companies are facing over their ESG disclosures and employment considerations for using AI in the workplace, among...more
6/27/2023
/ Acquisitions ,
Activist Investors ,
Anti-Discrimination Policies ,
Anti-Money Laundering ,
Artificial Intelligence ,
Capital Markets ,
Confidential Information ,
Corporate Governance ,
Corporate Restructuring ,
Cryptoassets ,
Cryptocurrency ,
Disclosure ,
Employer Liability Issues ,
Enforcement Actions ,
Environmental Social & Governance (ESG) ,
EU ,
Financial Institutions ,
Member State ,
Mergers ,
New Rules ,
No-Action Requests ,
Private Equity ,
Proxy Season ,
Publicly-Traded Companies ,
Reporting Requirements ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Shareholders ,
Technology ,
UK
The UK’s Prudential Regulation Authority (PRA) has reiterated its concerns regarding the UK bulk purchase annuity market. This contributes to a broader international theme of regulators expressing concern regarding the rapid...more
In late January 2023, the UK government issued a detailed consultation paper to introduce a long-awaited resolution regime for UK (re)insurers. The new regime addresses long-standing concerns about how the UK would manage one...more
The UK Prudential Regulation Authority (PRA) laid out its priorities for insurance supervision this year in a 10 January 2023 Priorities Letter. In this newsletter, we summarise the broad themes emerging from the Priorities...more
1/30/2023
/ Business Plans ,
Creditors ,
EU ,
European Commission ,
Exit Planning ,
Financial Institutions ,
Financial Markets ,
Financial Services Industry ,
Insurance Industry ,
Investment ,
Legislative Agendas ,
Life Insurance ,
Market Conditions ,
Proposed Legislation ,
Prudential Regulation Authority (PRA) ,
Reinsurance ,
Risk Management ,
Solvency II ,
UK
In this episode of “The Standard Formula” podcast, host Robert Chaplin is joined by investment management partner Greg Norman to discuss the Edinburgh Reforms, which serve as the UK’s most significant divergence to date from...more
Following the recently introduced Solvency UK for insurers, the UK Chancellor of the Exchequer Jeremy Hunt (the UK finance minister) has announced the Edinburgh Reforms, a further series of reforms aimed at the UK financial...more
12/20/2022
/ Bank of England ,
Banking Sector ,
Digital Currency ,
Enforcement ,
EU ,
Financial Institutions ,
FinTech ,
Investment ,
Investment Management ,
New Legislation ,
Proposed Legislation ,
Proposed Regulation ,
Regulatory Agenda ,
UK
Following the UK’s departure from the European Union (Brexit) on December 31, 2020, the UK is now exercising its freedom to move away from key EU insurance prudential regulatory standards. These moves include liberalization...more