paul fisher : pra solvency ii conference – countdown to implementation speech by mr paul fisher, executive director for insurance supervision of the bank of england and deputy head of the prudential regulation authority ( pra ), at the pra solvency ii conference, london, 17 october 2014. * * * good morning and thank you for coming today. first let me introduce myself. i have been both an academic and a long - term central banker – 24 years and counting at the bank of england. i have worked across the bank as a specialist economist / forecaster, private secretary to eddie george, head of foreign exchange and then markets director, i have served 5 years on the mpc, 2 years on the interim fpc and am now pledged to the pra board. insurance is not an entirely new sector to me. for many years i have been speaking with the asset management arms of many insurance firms about your businesses, in edinburgh as well as london. one of our strategic aims is to deliver supervision as one bank and one of my personal objectives is to maximise the synergies of insurance supervision operating as part of the bank of england. there is a lot to be gained by us and the industry if we can do that. but since taking over from julian adams as executive director for insurance, one thing has been very, very clear. right now, solvency ii is the main game in town. yes, there are new and continuing challenges to business models across the whole of the insurance sector, whether from changes to government regulations affecting annuity businesses, through the advent of new capital, particularly in re - insurance, to challenges from overseas insurers. those challenges are short, medium and long - term and very considerable. we can ’ t – and won ’ t – take our eyes off those challenges to the industry. but solvency ii is a train of the future speeding down the track towards us – for both regulators and firms the message is : be on board or get left behind. so it is a key priority for us, working with you, to get implementation right and on time. the clocks are counting down. we are now at a pivotal moment for solvency ii preparations. solvency ii will bring about the most significant change to the industry in decades. following years of negotiation and delays, we are finally at a point where the end is in sight and the regime is to become a reality. with the majority of the legislation now finalised, the pr

to be aware of. if there are a lot of you trying to get approval, and only one of us, don ’ t expect that you can all present us with your models at the last minute and expect a one - to - one service. if too many firms leave their preparations too late, then we will have to prioritise – if you want to be sure, then get in as early as you can. naturally, a significant proportion of our work relates to internal model approval, given the complex nature of many models and the detailed requirements of the solvency ii tests and standards. but the large volume of other solvency ii work is certainly not being ignored. part of the purpose of this conference is to draw attention to the requirements in relation to the standard formula, other approvals and reporting requirements ; which affect both internal model and standard formula firms. the title of today ’ s conference is “ countdown to implementation ” and in the sessions that follow we will : • set out, as far as policy certainty allows, some of the key requirements and deadlines for firms between now and 1 / 1 / 16 ; • provide you with the information you need to be ready for transposition and implementation ; • and provide an opportunity for you to ask questions and discuss key topics with representatives from the bank. on the internal model approval process ( imap ), good progress is now being made by some firms on their models ; however many of you are behind and timelines look very tight for remedial action. in order for the pra to review models, we must receive all necessary documentation and evidence of compliance in good time and produced to a sufficient standard. the deadline for pre - application submissions is march 2015 ; although firms should be striving to submit as soon as they are ready to give themselves more time to respond to pra feedback on their models. i understand that some of your work depends on responses by us – i can assure you that we will be making our best endeavours to react quickly and make any remaining decisions or give necessary guidance as soon as we are able. as governor mark carney noted in his speech in september, the pra will not hesitate to withhold approval for inadequate or opaque models. the responsibility to meet the solvency ii tests and standards rests solely with firms and their senior management. although the bank will continue to work with firms as they finalise their models, be under no illusion that each model will be assessed comprehensively and objectively against