By Carolyn Cohn
LONDON (Reuters) – Britain's top two insurers Aviva & Prudential along with the Lloyd's of London insurance market were among the 19 firms whose capital calculation models the Bank of England approved on Saturday.
Approval means the named insurers can use in-house internal models to determine how much capital they must hold to safeguard policyholder commitments under new European Union Solvency II capital rules that come into force next month.
Without endorsement, firms must use a standard calculation method of their solvency set out by regulators, which typically leads to higher capital requirements.
"Going forward we will monitor insurers' models carefully in order to ensure they continue to deliver an appropriate level of capital," Andrew Bailey, chief executive of the Bank of England's Prudential Regulation Authority, said in a statement.
The insurers approved include all the FTSE 100 insurers which submitted their internal models, along with Scottish Widows, a unit of UK bank Lloyds. The Bank of England had said "around 20" models had been submitted for approval.
(Additional reporting by Huw Jones; Editing by Keith Weir)