1.1 This Prudential Regulation Authority (PRA) policy statement (PS) provides the PRA's feedback to responses received to the consultation paper (CP) 19/23 - Review of Solvency II: Reform of the Matching Adjustment. Published in September 2023, CP19/23 was the second major PRA consultation to deliver significant reforms to Solvency II and implement the conclusions of the Government's Review of Solvency II: Consultation - Response ('November 2022 statement'). The CP set out the PRA's proposed reforms that will enable broader and quicker investment by insurers in their matching adjustment (MA) portfolios, while improving responsiveness to risk and enhancing firms' responsibility for risk management.
1.2 This PS also contains the PRA's final policy as follows:
- a new Matching Adjustment Part of the PRA Rulebook (Appendix 1);
- amendments to the Technical Provisions, Conditions Governing Business and Glossary Parts of the PRA Rulebook (Appendix 1);
- updated supervisory statement (SS) - S
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