Captives will have to demonstrate stronger governance under Solvency II: Towers Watson

Captive insurers covering employee benefit risks will have to implement stronger governance and risk management to comply with the second pillar of Solvency II regulations, according to Towers Watson & Co.

Towers Watson director Mark Cook said employee benefit risks have "different risk profiles to most of captives' 'normal' property/casualty business so captive boards are starting to recognise that they need specialist benefits expertise and advice," Money Marketing reported. The consultancy said about one fourth of single-owner captives are European Union- or Bermuda-domiciled, adding that Bermuda is set to implement a modified version of Solvency II.

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