Guernsey skips Solvency II equivalence
Domicile sees no benefit for captives Reprints
ST. PETER PORT, Guernsey—Guernsey's financial regulators say the domicile will not seek equivalence under Solvency II, noting they doubt that the mutual recognition status would benefit the captive industry.
The States of Guernsey Commerce and Employment Department and the Guernsey Financial Services Commission, which regulates captives and insurers, said in a joint statement that they have no plans to seek equivalence under the risk-based capital regulatory regime slated for introduction in the European Union in 2012.
Guernsey, the fourth-largest captive domicile in the world, is a U.K. crown dependency but is not itself a member of the European Union.
In the joint statement, the regulators said Guernsey “remains committed to meeting internationally accepted regulatory standards as set by the International Assn. of Insurance Supervisors and endorsed by” the Group of 20 industrialized nations.
The regulators also said they will monitor the development of Solvency II and whether full or partial equivalence with the regime might be beneficial to Guernsey and consult with the insurance industry before any decision is made.
In the statement, Peter Niven, chief executive of Guernsey Finance, which promotes the island's financial industry, said it is not believed that seeking equivalence under Solvency II would benefit the captive industry in Guernsey as things currently stand.
“Indeed, the treatment of captives under Solvency II remains uncertain and so we will be keeping a close eye on this,” Mr. Niven said.
While Guernsey is not seeking Solvency II equivalence, other jurisdictions outside the European Union, including Bermuda and Switzerland, are seeking the mutual recognition status.
