Solvency II: Matching Adjustment Permissions

Statement of policy

First published on 06 June 2024

This statement of policy (SoP) is relevant to:

  • all UK Solvency II firms;
  • the Society of Lloyd’s and its members and managing agents; and
  • insurance and reinsurance undertakings that have a UK branch (third country branch undertakings),

where they are applying, or are seeking permission to apply, the matching adjustment (MA).

This SoP should be read in conjunction with the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023, the Matching Adjustment Part of the PRA Rulebook, the Investments Part of the PRA Rulebook, the relevant rules in the rest of the Solvency II Sector of the PRA Rulebook, supervisory statement (SS) 7/18 – Solvency II: Matching adjustment, SS1/20 – Solvency II: Prudent Person Principle, SS8/18 –  Solvency II: Internal models – modelling of the matching adjustment, SS3/17 – Solvency II: Illiquid unrated assets and the PRA’s insurance approach document. For information about making an application, see the Authorisations page.

This SoP sets out the PRA’s approach to granting MA permissions, as well as variations to those permissions and the circumstances in which the PRA may take the decision to revoke a firm’s MA permission. It also sets out how the PRA will assess the ongoing performance of the MA permissions framework.

Current version

Published on 6 June 2024. Effective from 30 June 2024.

- Following PS10/24 – Review of Solvency II: Reform of the Matching Adjustment