The rule in plain words
The template Solvency Capital Requirement - Simplifications (IR.26.07) should be reported if any simplification in IR.26.01, IR.26.03, IR.26.04 (except simplifications for the articles 95a, 96a and 102a) or any natural catastrophe risk simplification in IR.27.01 has been applied (except for the simplification for captives for market risk concentration in IR.26.01)
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
- 01Open the tables below and find the cells the rule reads.
- 02The check applies only when its first part holds in your return. When it does, the second part must hold too: fix the second part, or correct the first.
- 03It runs only when your filing indicators mark IR.01.01, IR.26.01, IR.26.03, IR.26.04 and IR.27.01 as reported.
- 04This is a warning. It does not stop the return on its own, but your supervisor may ask you to explain it.
The cells it reads
Content of the submission (IR.01.01.01.01)
Row
- R0560IR.26.07.01 - Solvency Capital Requirement - Simplifications
Column
- C0010c
Solvency capital requirement - market risk - simplifications used (IR.26.01.01.03)
Rows
- R0012Simplifications spread risk - bonds and loans
- R0020Captives simplifications - interest rate risk
- R0030Captives simplifications - spread risk on bonds and loans
Column
- C0010Simplifications used
Solvency capital requirement - life underwriting risk - simplifications used (IR.26.03.01.03)
Rows
- R0010Simplifications - mortality risk
- R0020Simplifications - longevity risk
- R0030Simplifications - disability-morbidity risk
- R0040Simplifications - lapse risk
- R0050Simplifications - life expense risk
- R0060Simplifications - life catastrophe risk
Column
- C0010Simplifications used
Solvency capital requirement - health underwriting risk - simplifications used (IR.26.04.01.09)
Rows
- R0010Simplifications - health mortality risk
- R0020Simplifications - health longevity risk
- R0030Simplifications - health disability-morbidity risk-medical expenses
- R0040Simplifications - health disability-morbidity risk-income protection
- R0050Simplifications - SLT lapse risk
- R0060Simplifications - health expense risk
Column
- C0010Simplifications used
Solvency capital requirement - non-life and health catastrophe risk: simplifications used (IR.27.01.01.27)
Row
- R0002Simplifications used - natural catastrophe risk
Column
- C0001Simplifications used
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 warning.
The Bank’s own words and formula
In the Bank of England’s list of validations, word for word:
The template IR.26.07 - Solvency Capital Requirement - Simplifications should be reported if any simplification in IR.26.01, IR.26.03, IR.26.04 (except simplifications for the articles 95a, 96a and 102a) or any natural catastrophe risk simplification in IR.27.01 has been applied (except for the simplification for captives for market risk concentration in IR.26.01).
Show the formulaShowHide
The Bank of England's formula. Cells are written as {t: table, r: row, c: column}.
if ({t: IR.26.01.01.03, r: R0012, c: C0010} = $[s2c_AP:x64] or {t: IR.26.01.01.03, r: R0020, c: C0010} = $[s2c_AP:x33] or {t: IR.26.01.01.03, r: R0030, c: C0010} = $[s2c_AP:x33] or {t: IR.26.03.01.03, r: R0010, c: C0010} = $[s2c_AP:x33] or {t: IR.26.03.01.03, r: R0020, c: C0010} = $[s2c_AP:x33] or {t: IR.26.03.01.03, r: R0030, c: C0010} = $[s2c_AP:x33] or matches({t: IR.26.03.01.03, r: R0040, c: C0010}, "^((1)|(1,2))$") or {t: IR.26.03.01.03, r: R0050, c: C0010} = $[s2c_AP:x33] or {t: IR.26.03.01.03, r: R0060, c: C0010} = $[s2c_AP:x33] or {t: IR.26.04.01.09, r: R0010, c: C0010} = $[s2c_AP:x33] or {t: IR.26.04.01.09, r: R0020, c: C0010} = $[s2c_AP:x33] or {t: IR.26.04.01.09, r: R0030, c: C0010} = $[s2c_AP:x33] or {t: IR.26.04.01.09, r: R0040, c: C0010} = $[s2c_AP:x33] or matches({t: IR.26.04.01.09, r: R0050, c: C0010}, "^((1)|(1,2))$") or {t: IR.26.04.01.09, r: R0060, c: C0010} = $[s2c_AP:x33] or matches({t: IR.27.01.01.27, r: R0002, c: C0001}, "^((1)|(2)|(3)|(4)|(5)|(1,2)|(1,3)|(1,4)|(1,5)|(2,3)|(2,4)|(2,5)|(3,4)|(3,5)|(4,5)|(1,2,3)|(1,2,4)|(1,2,5)|(1,3,4)|(1,3,5)|(1,4,5)|(2,3,4)|(2,3,5)|(2,4,5)|(3,4,5)|(1,2,3,4)|(1,2,3,5)|(1,2,4,5)|(1,3,4,5)|(2,3,4,5)|(1,2,3,4,5))$")) then {t: IR.01.01.01.01, r: R0560, c: C0010} = $[s2c_CN:x1] else true()Other rules on Content of the submission (IR.01.01)
- Content of the submission and 2 other templates: a conditional check (IR_bv1736)
- Content of the submission and basic information - general: a conditional check (IR_bv1746_01)Blocking
- Content of the submission and basic information - general: a conditional check (IR_bv1746_02)Blocking
- If Impact of long term guarantees measures and transitionals is reported then rows r0090 and r0110 have to be greater than 0 (IR_bv1735)
- If Impact of long term guarantees measures and transitionals is reported then rows r0010, r0020, r0050 and r0100 have to be different from 0 (IR_bv1734)
- Content of the submission and basic information - general: a conditional check (IR_bv1749_01)
- Content of the submission and basic information - general: a conditional check (IR_bv1749_02)
- Content of the submission and basic information - general: a conditional check (IR_bv1751)
Every Solvency UK rule on IR.01.01
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.