old and new UK GAAP and SII

Discussion in 'SA2' started by Viki2010, Apr 20, 2017.

  1. Viki2010

    Viki2010 Member

    Hi, chapter 18 discusses that an insurer has a choice to stick to "old UK GAAP" OR transition to SII requirements.
    If lets say an insurer continues with "old UK GAAP", which was (I am assuming still is) based on SI rules, how is that working out in the SII regime that we are now in? Are accounting practices an exception and don't have to be in line with regulatory SII requirements? Or is it just in a transition period of time?
     
  2. Lindsay Smitherman

    Lindsay Smitherman ActEd Tutor Staff Member

    Accounting practices relate to financial reporting in reports & accounts (principally aimed at providing information to shareholders) and are governed by legislation such as the Companies Act.

    Solvency II relates to supervisory reporting (principally aimed at ensuring ongoing insurance company solvency and protecting policyholders) and is governed by EU legislation as transformed into rules set by the PRA.

    The two are distinct sets of requirements, although there are similarities - and consequently the potential for using the same liability calculations for both. The implications for accounting practices of the introduction to Solvency II are explored further in sections 2.6 and 3.2 of Chapter 18, including Question 18.2.
     

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