At the time of issuing this Addendum we are aware of the following amendments that will occur during 2012:
- Euro denominated amounts: an announcement has already been made that these will all be increased as a result of the annual inflation review. This will affect both the base capital resources requirements and for general insurance thresholds at which the lower premiums and claims percentage is charged. The increase is 14.9% rounded up to the nearest €100,000.
Following HM Treasury becoming a shareholder in a number of banks, the FSA made available a waiver by consent to enable insurers to not have to treat exposures to these HMT owned entities as being exposures to a group of closely related counterparties for the purposes of applying the limits in INSPRU 2.1.22R. Where insurers applied for this modification, it is only valid until 31 March 2012. The FSA has not yet indicated whether it will be extended.
In addition to these known events, insurers with significant exposure to Greek sovereign debt should consider the implications of any Greek debt rescheduling. If this should happen, then Greece will cease to be a Zone A government, meaning that any such debt will cease to be exempt from the asset exposure limits.
Should you have any questions relating to your regulatory returns, please contact your usual KPMG contact or any of our subject matter experts listed.