Minimum capital requirement - only life or only non-life activity: a total must equal the sum of its parts (IR.28.01, Bank of England rule IR_bv0863)

The rule in plain words

The headline gives only the template and the kind of check, because the rule is too long to say in a headline. The plain words above say all of it.

What to do if your return fails it

1. 01Open the tables below and find the cells the rule reads.
2. 02Add up the parts in your return and compare the result with the total.
3. 03If they differ, a part is missing, a value sits in the wrong cell, or the total is out of date.
4. 04The Bank of England allows a small rounding difference, worked out from the decimals each value is reported with.
5. 05It runs only when your filing indicators mark IR.28.01 as reported.
6. 06This is a blocking check. A return that fails it is normally rejected, so fix it before you submit.

The cells it reads

A worked example

With simple numbers.

Which returns it applies to

Line4 Check runs it on annual solo (ARS) return on Bank of England taxonomy 2.2.0. The Bank of England applies it to annual solo (ARS) returns, as a blocking check.

The Bank’s own words and formula

In the Bank of England’s list of validations, word for word:

The overall Combined MCR reported in IR.28.01 - Minimum Capital Requirement - Only life or only non-life insurance or reinsurance activity should be equal to sum of the "Linear formula component for non-life insurance and reinsurance obligations" and the "Linear formula component for life insurance and reinsurance obligations".

Other rules on Minimum capital requirement - only life or only non-life activity (IR.28.01)

Every Solvency UK rule on IR.28.01

Checks like this one, run at the point of submission, are the first step to real-time supervision. Line4 builds SupTech software for financial regulators that runs checks like these as each return arrives.