Prudential Regulation Authority Rulebook

4.1

In the PRA Rulebook, Third Country Branches 13 requires a third-country branch undertaking to maintain adequate worldwide financial resources and assess the adequacy of these resources. For this purpose, the PRA will consider the undertaking’s compliance with the prudential regime under which it is supervised in its home country.

4.2

The PRA expects the third-country branch undertaking to provide sufficient information so that the PRA may form an opinion on the adequacy of the worldwide financial resources of the undertaking.

4.3

Where the PRA assesses the home jurisdiction’s regime to be broadly equivalent to the regime applied by the PRA to (re)insurers whose head office is in the UK, then compliance with the financial resources requirements of that prudential regime may be relied on by the third-country branch undertaking as tending to establish compliance with the PRA’s worldwide financial resources rule. Contravention of financial resources requirements of the home jurisdiction’s prudential regime may be relied on as tending to establish contravention of the PRA’s worldwide financial resources rule.

4.4

Where that prudential regime is not broadly equivalent to the regime applied by the PRA to (re)insurers whose head office is in the UK and a third-country branch undertaking from such a jurisdiction notifies the PRA that it is in financial difficulty, then the PRA will take appropriate actions such as assessing whether that third-country branch undertaking still meets Threshold Conditions and has adequate financial resources. This assessment may use the methods and techniques applicable to (re)insurers whose head office is in the UK.

4.5

Where the adequacy of worldwide financial resources of the third-country branch undertaking is found to be in contravention of the home jurisdiction’s prudential regime, the PRA would expect further information to be submitted by the third-country branch undertaking.

4.6

As a minimum, the PRA would expect the third-country branch undertaking to submit a realistic plan to recover sufficient financial resources which explicitly identifies any branch specific recovery conditions.