The application of the Prudential Regulation Authority’s new rules that will cover the equity release sector has been pushed back a year to 31 December 2019.
Previously pencilled in for implementation on 31 December 2018, the PRA has decided to adjust the date following industry feedback on its consultation paper ‘Solvency II Equity Release Mortgages’ which closed on 30 September.
The consultation paper followed proposals set out by the PRA concerning capital requirements for companies providing equity release mortgages. It also sought views on how “greater clarity” for insurers and reinsurers that assess risk arising from the no negative equity guarantee might be provided. The proposals caught some flak from the industry in July this year.
“The PRA is making this announcement now in order to clarify the position for insurers planning their year-end 2018 processes,” says a spokesperson for the PRA.
They add: “The PRA is currently giving careful consideration to the consultation responses and the impact, if any, of the updated implementation date to the proposed phase-in period. The PRA will publish final policy and supervisory statements in due course.”