PRA: internal model insurers need a ‘plan B’

Firms must prepare in case their models are rejected, says regulator


UK supervisor the Prudential Regulation Authority (PRA) is urging internal model insurers to develop contingency plans in case their model submissions fail to secure supervisory approval.

UK firms should not assume it is appropriate simply to revert to using the Solvency II standard formula if an application is rejected and must ensure they have plans to cover a range of outcomes following the regulator's decision, according to industry sources.

The PRA warned firms during a meeting with the ind