SUP App 2.14A Fairness issues for with-profit firms in difficulty or in an irregular situation

1SUP App 2.14A applies to a firm carrying on with-profits business.

Action which a firm takes either to restore its capital resources to the levels set by the intervention points in this appendix or in PRA Rulebook: Solvency II Firms: Undertakings in Difficulty, or to prevent its capital resources falling below those points, should be consistent with Principle 6 of the FCA's Principles for Businesses. Principle 6 requires a firm to pay due regard to the interests of its customers and treat them fairly.

If a firm intends either (a) to remedy a fall in capital resources, or (b) to prevent such a fall, for example, by taking management action to reduce the risks to which a with-profits fund is exposed or by reducing non-contractual benefits for policyholders, it should explain to the FCA how such proposed actions are consistent with the firm's obligations under Principle 6 (Customers' interests).

Where a firm submits a plan for restoration under this appendix or complies with PRA Rulebook: Solvency II Firms: Undertakings in Difficulty, the FCA would expect an explanation of how any actions it plans to take to restore its capital resources are consistent with the firm's obligations under Principle 6 (Customers' interests).