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Prudential plc

Prudential

Prudential plc is one of the world’s leading financial services groups, serving 26 million insurance customers, with £657bn of total assets under management (as at 31 December 2018).

Lobbying Activity

Response to Revised calibrations for securitisation investments by insurance and reinsurance undertakings under Solvency II

15 May 2018

M&G Prudential welcome harmonising relevant parts of the existing Solvency II legislation, (“SII”), with the now established framework for Simple, Transparent and Standardised (“STS”) securitisations and view this as a positive step for the market. Aligning definitions of the current Type 1 / Type 2 securitisations to the current STS / non-STS definitions provides benefits as it allows for the inclusion of non-senior tranches of STS transactions which were prohibited under the original SII Type 1 definition. Re-calibrating STS securitisation capital requirements from previously onerous conditions broadly brings in line the attractiveness of senior STS tranches to other competing fixed income asset classes (corporate bonds, loans etc.). In addition, the revision to include non-senior tranches in the STS designation and introducing a new capital treatment for this subset of mezzanine bonds may increase insurance company interest in this part of the capital structure, but we still believe this will be limited. The difference between capital charges for these mezzanine / junior tranches versus senior STS tranches is still punitive versus other asset classes. In addition, the latest capital re-calibrations missed an opportunity to revise the capital charges for non-STS transactions. Asset classes captured under this definition continue to attract penal capital charges. Post crisis, most non-STS eligible transactions have performed well and new structures are more robust than pre-crisis transactions. As such, we would encourage the Commission to re-evaluate these before final drafts are published and the rules come into force in January 2019. Overall, M&G Prudential broadly welcomes the changes proposed to the regulatory capital treatment of STS securitisation positions under Solvency II. However, we feel that these changes, whilst broadly moving in the right direction, could have been bolder in order to more significantly promote the European ABS asset class for insurance companies.
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31 Jan 2017 · CMU, EFSI

Meeting with Ioana Diaconescu (Cabinet of Commissioner Pierre Moscovici)

17 May 2016 · EU growth and financial reform agenda

Meeting with Jon Nyman (Cabinet of Vice-President Cecilia Malmström)

17 May 2016 · Trade Policy Agenda in ASEAN

Meeting with Marlene Madsen (Cabinet of Vice-President Jyrki Katainen)

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Meeting with Violeta Bulc (Commissioner) and

22 Feb 2016 · Commissioner Bulc meeting Prudential Representatives on Investments in Transport

Meeting with Jonathan Hill (Commissioner)

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Meeting with Mette Toftdal Grolleman (Cabinet of Commissioner Jonathan Hill)

11 Nov 2015 · Solvency II; Equivalence; CMU; International issues

Meeting with Paulina Dejmek Hack (Cabinet of President Jean-Claude Juncker)

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Meeting with Jack Schickler (Cabinet of Commissioner Jonathan Hill) and BlackRock and

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12 Jan 2015 · Capital Markets Union, Solvency II, priorities of the Juncker Commission including investment plan

Meeting with Edward Bannerman (Cabinet of Vice-President Jyrki Katainen)

12 Jan 2015 · Investment Plan