Impact of long term guarantees measures and transitionals and minimum capital requirement - only life or only non-life activity: a conditional check (IR.22.01, IR.28.01, Bank of England rule IR_bv1771)

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. 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.
3. 03The Bank of England allows a small rounding difference, worked out from the decimals each value is reported with.
4. 04It runs only when your filing indicators mark IR.28.01 as reported.
5. 05This is a blocking check. A return that fails it is normally rejected, so fix it before you submit.

The cells it reads

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 MCR reported in IR.28.01.01.05 - Minimum Capital Requirement - Only life or only non-life insurance or reinsurance activity should be equal or larger than 25% of the "SCR" and equal or less than 45% of the "SCR" when the "MCR" is different from the "Absolute floor of the MCR".

Other rules on Impact of long term guarantees measures and transitionals (IR.22.01)

Every Solvency UK rule on IR.22.01

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.