Several of Britain's biggest insurance firms, including Aviva, Prudential and Lloyds of London have been given the thumbs up by the Bank of England for new rules governing how much capital they should hold.
The Solvency II capital rules which come into force across the EU from the start of next year, mean insurers are able to set their own rules internally, with oversight from the Prudential Regulation Authority. Now, 19 insurers in total have been given the greenlight.
Those which don't have approval are required to conform to a standard formula for calculating capital, which can result in a larger requirement forcing some insurers to raise further cash.
The details of each insurers capital ratios have not been released.
“Today marks a major milestone in the implementation of Solvency II in the UK. The PRA has approved 19 insurers’ internal models for use from day one of the new regime. Going forward we will monitor insurers’ models carefully in order to ensure they continue to deliver an appropriate level of capital,” said the chief of the Bank of England's PRA, Andrew Bailey.
All of the FTSE 100 insurers gained approval in this round. The 19 firms are:
- Aspen Insurance UK
- British Gas Insurance
- Just Retirement
- Legal & General
- Markel International Insurance Company
- MBIA UK Insurance
- The National Farmers’ Union Mutual Insurance Society
- Pacific Life Re
- Pension Insurance Corporation
- Phoenix Group
- QBE European Operations
- RSA Insurance
- Scottish Widows Group
- Society of Lloyd’s
- Standard Life
- Unum European Holding Company
The new rules are similar to those governing the capital requirements of banks.