The Sterling value of the Euro for insurance regulatory purposes for the 12 month period beginning 31 December 2007 is 69.730 pence. This value should be used for the calculation of capital resources requirements and will apply to the relevant regulatory returns that insurers are required to deposit under FSA rules.

Rule 2.1.33R of the General Prudential Sourcebook (GENPRU) and rule 1.1.50R of the Prudential Sourcebook for Insurers (INSPRU) provide that:

  • For the purposes of the base capital resources requirement and INSPRU 1.1.45R(1) and INSPRU 1.1.47R(1), the exchange rate from the Euro to the pound sterling for each year beginning on 31 December is the rate applicable on the last day of the preceding October for which the exchange rates for the currencies of all the European Union member dates were published in the Official Journal of the European Union.

Rule 4.7(7) of IPRU(FSOC) provides that:

  • For the purposes of the Rules in Chapter 4 and the definition of non-directive friendly society, the exchange rate from the Euro to the pound sterling for each year beginning on 31 December is the rate applicable on the last day of the preceding October for which the exchange rates for the currencies of all European union member states were published in the Official Journal of the European Communities.
    This year's value was set as at 31 October 2007 and published in the Official Journal on 1 November 2007.

It is important to note that this rate applies from 31 December 2007 (not 1 January 2008) and is therefore the rate to be applied in calculations for the regulatory returns carried out in respect of the 2007 calendar year end.

EU Commissions' review of the BCRR

Following the EU Commission's review of the Base Captial Resources Requirement (BCRR) as set out in the EU insurance Directives no changes to the BCRR have been made.

Following the review described in GENPRU 2.1.31G and INSPRU 1.1.49G, base capital resource requirements (BCRR) for insurers (other than non-directive insurers) and the Euro amounts specified in INSPRU 1.1.45R(1) and INSPRU 1.1.47R(1) (used in determining the general insurance capital requirement (GICR)) have remained unchanged.

The BCRR requirements are:

Liability insurer – directive mutual – €2.4m
Liability insurer – other – €3.2m
Other general insurer – directive mutual – €1.65m
Other general insurer – other – €2.2m
Long-term insurer – directive mutual – €2.4m
Long-term insurer – other – €3.2m

The premium index in INSPRU 1.1.45R is €53.1m.
The claims index in INSPRU 1.1.47R is €37.2m.