Background

FRED 64 was issued by the FRC in December 2015 and proposed updating the terminology and definitions used in FRS 103 as a result of the implementation of Solvency II.  The main changes proposed were:

• Removal of references to the PRA realistic capital regime and the Prudential Sourcebook for Insurers (INSPRU) which will be replaced with the commencement of Solvency II.
• Clarification that entities should be permitted to continue to apply established accounting practice in their financial statements under the Solvency II regime and hence are not required to change their accounting policies.
• Clarification of the scope of the Standard for with-profits businesses and with-profits funds in paragraph 3.1b.   

Current status of the project

Amendments to FRS 103 Insurance Contracts - Solvency II was published by the FRC in May 2016.  The amendments are applicable for accounting periods ending on or after 1 January 2016.  Early adoption is not permitted.