UK Insurance: General (19 December 2016)

OAC Digest
Accounting standards, Actuarial, Investments, Life insurance, Non-Life, PRA / Bank of England, Solvency II

19 December 2016

Selected recent UK news items of more general interest:  

On 14 December, the MPC voted unanimously to maintain Bank Rate at 0.25% and continue with the programme of corporate and UK government bond purchases. 

In his speech on 14 December, Mark Carney welcomed the report "Recommendations of the Task Force on Climate-related Financial Disclosures". As Chair of the Financial Stability Board, he remarked that "[Non-Life] Insurers are ... amongst those with the greatest commercial incentives to understand and tackle climate change in the short term." The recommendations include disclosures "for use by all publicly-listed companies, whatever their sector, across the full set of climate-related financial risks they face". The release of the report launched a 60-day public consultation period. The Bank of England is keen to manage the risks to financial stability in the transition to a low carbon economy. 

Latest ONS statistics:

  • Pay for employees in Great Britain increased by 2.5% and 2.6% including and excluding bonuses respectively
  • Prices up 1.2% (up from 0.9%) / 2.2% (up from 2.0%) as measured by CPI/RPI.

On 14 December, the FRC published revised Technical Actuarial Standards (TASs). TAS 100 will apply to all technical actuarial work and TAS 200, TAS 300 and TAS 400 apply to specific areas of technical actuarial work - Insurance, Pensions and Funeral plan trusts respectively. The revised standards will come into force on 1 July 2017.

On 13 December, the FRC published "Amendments to FRS 101 Reduced Disclosure Framework and FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland." The amendments remove the requirement to notify shareholders in writing of the intention to take advantage of the disclosure exemptions in the two standards. They also published FRED 66 proposing limited amendments to FRS 101 in relation to IFRS 16 Leases.

On 5 December, the UK government published draft legislation overview documents for the Finance Bill 2017. The government will legislate to allow individuals who have part surrendered or part assigned their life insurance policies and inadvertently generated a wholly disproportionate tax charge, to apply to HMRC to have the charge recalculated on a just and reasonable basis. They will also legislate to give the government the power to amend by regulations the list of assets that can be invested in without triggering the personal portfolio bonds (PPB) anti-avoidance rules. The draft regulations allow Real Estate Investment Trusts, Overseas Investment Trust Companies and Authorised Contractual Schemes, to be selected by policyholders without triggering the PPB rules.

David Gray

For more information
David Gray
Consultant Actuary

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