LONDON, Dec 5 (Reuters) - Britain’s top two insurers Aviva and Prudential along with the Lloyd’s of London insurance market were among the 19 firms whose capital calculation models the Bank of England approved on Saturday.
Approval means the named insurers can use in-house internal models to determine how much capital they must hold to safeguard policyholder commitments under new European Union Solvency II capital rules that come into force next month.
Without endorsement, firms must use a standard calculation method of their solvency set out by regulators, which typically leads to higher capital requirements.
“Going forward we will monitor insurers’ models carefully in order to ensure they continue to deliver an appropriate level of capital,” Andrew Bailey, chief executive of the Bank of England’s Prudential Regulation Authority, said in a statement.
Reporting by Carolyn Cohn and Huw Jones; Editing by Keith Weir