Fears that Solvency II will reduce competition and cause some insurers to stop writing certain lines of business continue to concern financial services executives. In fact, a recent survey of executives in the United Kingdom found that an overwhelming majority believe that the still to be implemented risk-based capital regulatory regime will render some lines of business unprofitable for underwriters and drive up prices for buyers. ›› More
Insurers, reinsurers and captive owners face enormous challenges in preparing for Solvency II, the Europe-wide risk-based capital regulatory regime slated to come into force in the next couple of years. The new rules seek to protect policyholders, ensure that the industry can withstand economic shocks, and protect the viability and stability of the financial system in Europe. But despite the nearing deadlines, several areas of Solvency II have yet to be formally settled, and insurers and reinsurers continue lobbying to ensure that the eventual rules are not unfavorable to them. Meanwhile, industry companies are readying their businesses for when the new regime takes effect. ›› More
Will continuing uncertainty over details of Solvency II combined with limited resources hamper small and medium-sized insurers' efforts to comply with the directive? Some say that the result could be a last-minute compliance rush and an increase in demand for expensive resources such as experts with specialist data management skills. ›› More
The United States' state-based system of insurance regulation hampers Solvency II equivalence assessment, said the Committee of European Insurance and Occupational Pensions Supervisors, which was succeeded this year by the European Insurance and Occupational Pensions Authority as the European Union's insurance supervisory authority. As a result, the body did not recommend that the United States be among the countries in the first wave of non-E.U. nations assessed for Solvency II regulatory equivalence. ›› More
The Comite Europeen des Assurances predicts that the higher capital costs associated with Solvency II could raise rates for some lines of coverage by as much as 20%. This spurred concerns among European risk managers that Solvency II could impose such stringent capital requirements that the number of insurers and captives would shrink, particularly given that captives might be excluded from simplification measures that could make capital requirements less burdensome. ›› More
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In this position paper on Solvency II, the European insurance federation, the Comité Européen des Assurances, says it supports a Jan. 1, 2013, start date for Solvency II.
The European Parliament’s decision to delay its vote on Omnibus II, the directive that would introduce Solvency II in stages, means new headaches for insurers. But does it mean that insurers slow down their preparations for Solvency II implementation? ›› More
European regulator seeks input on Solvency II assessment rules. At the same time, the U.K regulator hints that it might try to minimize the effects on U.K. insurers of having to comply with two sets of rules in 2013. ›› More
Why did Lloyd’s delay submitting its internal model to U.K. regulators for three months? ›› More
The U.K. insurance regulator's decision to delay full implementation of Solvency II until 2014 could mean that large insurers will have to comply with two sets of solvency rules next year. What are the practical effects of this decision on the insurance industry? ›› More
Insurers share their Solvency II implementation concerns ›› More
New insurance regulations in Europe are expected to create a windfall for investment consultants as insurers look for capital-efficient ways to manage assets that will need to be more closely linked to liabilities under Solvency II. ›› More
The advent of Solvency II-- even if delayed--may be prove to be among the biggest challenges faced by some insurers, both in Europe and beyond. But the view of Solvency II that prevailed at the Rendez-Vous de Septembre reinsurance gathering in Monte Carlo was one of possible new business opportunities rather than apprehension. ›› More
Confidence is high in Bermuda that the domicile will gain third-country equivalence with the Solvency II risk-based capital regulatory regime being drafted in Europe. Bermuda is among the first wave of countries, along with Japan and Switzerland, that are being considered for so-called third-country equivalence status, meaning its regulations have been accepted as comparable to the upcoming European rules. ›› More
Lloyd's of London has devoted significant resources to its drive to have its internal model for Solvency II compliance recognized by regulators. What does this mean for the 55 managing agencies operating within the market whose own readiness for Solvency II Lloyd's will assess this fall? How are their preparations coming along, and what approach are the managing agencies taking? ›› More
U.S. insurers need to work on readying themselves for Solvency II, even though the United States will not be among the first group of non-E.U. countries considered for equivalence under the new regulatory regime. Failure of the United States to achieve eventual equivalence could cause significant problems for insurers and policyholders on both sides of the Atlantic, experts warn. ›› More
The importance of Solvency II extends beyond Europe for two main reasons: its third-country equivalence procedures and the inclusion of many of its elements in new international insurance regulatory standards, writes David Snyder, associate general counsel of the American Insurance Assn. Separately and together, these aspects give Solvency II its global significance. But the danger of overregulation lurks as well, Mr. Snyder cautions. ›› More
Guernsey turns its back on Solvency II by declining to seek equivalency under the incoming regulatory regime. The island says that equivalency would not benefit its captive industry, though Guernsey regulators say they will monitor the development of Solvency II to decide whether full or partial equivalence with the regime might be beneficial to the island in the future. ›› More
Storm warning? The London-based International Underwriting Assn. says that a “regulatory maelstrom” is overwhelming insurers and reinsurers. A key reason for this assessment is the standard formula for capital requirements for nonlife companies under Solvency II, according to the IUA. It urges regulators not to impose “disproportionately high capital charges” on insurers and reinsurers. Concerns also have arisen over Solvency II's treatment of catastrophic exposures. ›› More
Could turnkey syndicates at Lloyd's of London prove a useful tool for companies seeking to diversify their lines of business in order to lower their Solvency II capital requirements? Turnkey syndicates, which are managed by third parties on behalf of capacity providers, could allow specialist insurers to diversify into Lloyd's. ›› More
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A comprehensive glossary providing definitions of Solvency II-related terminology, produced by the Comité Européen des Assurances.
Should reinsurance companies concerned about Solvency II think about changing their corporate structure? Read a view from London.
Here’s an updated version of basically everything you ever wanted to know about Solvency II, courtesy of the British FSA.
What’s the latest on implementation of Solvency II in the United Kingdom? Read the update given recently by Julian Adams, director of the insurance division in the Financial Services Authority.
Compliance with Solvency II’s demands is a huge challenge for some of the smaller businesses that operate within the Lloyd’s of London marketplace. Lloyd’s has produced an online tutorial to help board members and senior…
The European Commission summarizes the industry responses to its consultation of Level 2 implementing measures for Solvency II.
E.U. regulatory view on why Bermuda, Japan and Switzerland should be the first three regulatory regimes considered for equivalence and sets out a proposed process by which the U.S. regulatory regime could be assessed.
The Financial Services Authority, the U.K. insurance regulator, has compiled a library of all of its Solvency II-related documents dating back to 2006.
The Comité Européen des Assurances highlights the treatment of catastrophe risks as one of the biggest potential problems for insurers and reinsurers under Solvency II.
What methods do E.U regulators use to compute solvency capital requirements? This is a hardcore evaluation guide and be forewarned, it is a highly technical paper. But as a guide to a work in progress, this can be invaluable.
Successful implementation of Solvency II at Lloyd's of London is one of the market's top priorities. In this document, Lloyd's sets out six objectives intended to ensure the market meets that goal.
The European Insurance and Occupational Pensions Authority sets out its medium–term work plan for Solvency II.
In an early indication of the effectiveness of their Solvency II preparations, most European insurers and reinsurers remained financially “robust” in a test of their ability to withstand various economic shocks, but up to 10% failed to meet their minimum capital requirement under Solvency II. In addition, experts say insurers need to make certain they are ready for the risk-based capital regulatory framework. ›› More
Fewer than half of U.K. insurers surveyed this year are confident that the insurance industry will be ready for the proposed 2013 deadline for compliance with Solvency II. That conflicts with the results of a similar study a year earlier, in which more than 60% expressed confidence that the industry as a whole would be ready. Interestingly enough, nearly three-quarters of the 2011 respondents said that their own company would be ready. ›› More
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The results of the European Insurance and Occupational Pensions Authority most recent stress test designed to assess insurers’ resilience to a number of economic shocks.
Are British insurers falling behind in their preparation for Solvency II? Consider what a top regulator has to say.