Solvency II: Consistency of UK generally accepted accounting principles with the Solvency II Directive

This consultation paper seeks feedback on a draft supervisory statement which sets out the PRA's expectations of firms which are considering applying the derogation within Article 9 (4) of the Commission Delegated Regulation (EU) 2015/35 (‘the Solvency II Regulation'). This derogation permits a firm to value some assets and liabilities using local generally accepted accounting principles (GAAP) if they fulfil some very specific criteria listed in that Article.

The draft statement is relevant for firms within the scope of Solvency II for which annual financial statements and consolidated financial statements (if any) are prepared under UK generally accepted accounting principles.