PRA seeks input ahead of 2019 insurance stress test

The Prudential Regulation Authority (PRA) wants to get feedback from firms and industry participants prior to the insurance stress test it will be conducting starting July. In a letter sent to insurers, the PRA’s technical head of insurance Stefan Claus wrote: “General insurers will be most familiar with this exercise, as it represents an evolution of the stress testing exercises conducted in 2015 and 2017. For life insurers, this exercise captures potential risks that were not fully covered under last year’s EIOPA (European Insurance and Occupational Pensions Authority) stress test. “Alongside these market-wide stress tests, we will also be requesting a climate scenario designed to provide additional market impetus in this area, and to inform the bank’s development of a consistent and effective approach to climate-focused scenario analysis.” Claus said the purpose of the letter is to seek – until the end of May – industry input on any aspects of the insurance stress test ahead of the regulator’s formal announcement to request participation on July 01. The exercise will then run until September 30.

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