The Solvency II Experts News

The Council took note of progress on Solvency II and the number of provisions on which substantial work is still needed has been significantly reduced, and the presidency has started exchanges with representatives of the European Parliament. The supervision of insurance groups operating in several member states has in particular given rise to discussion, given the innovative nature of the Commission’s proposal on this issue, the different circumstances in the member states and different views on how to ensure policyholder protection. Other issues on which discussions have not yet concluded concern the treatment of equity risk, minimal capital requirements, surplus funds and participations. Seven of the 313 Articles in the Directive remain unresolved.

The insurance industry is currently operating in a liberal market characterised by pressure on capital and high business volumes. Developments in data analysis and processing have provided us with a better understanding of risk structure and dimension.

 Commission members are locked in last-minute talks to get the proposal approved.
 Mr Duverne, a member of the Axa management board, told delegates at its summer
 seminar that if the proposals did not go through by the end of the year, with the
 final regulations next year and implementation in 2012, decision-makers may have
 to go back to the drawing board.

 Click here to read the full article (source: ftadviser.com).

 

 The federation of french insurance companies (FSSA), told the assembly during a
 press conference that the standard formula proposed by CEIOPS was still causing
 problems as its calibration was too heavy.

 Click here to download the full press release.

 

 

 The FSA has warned the UK insurance industry may not be sufficiently prepared for
 Solvency II as concerns grow that the new regime may disproportionately benefit
 the largest insurers. Speaking at the recent ABI conference on Solvency II, Tim
 Edwards, a member of the wholesale and prudential policy team for the FSA, accused
 companies of underestimating their readiness for the reforms.

  Click here to read the full article (source: ftadviser.com).

 

Tim Harris, chief accountant for the Aviva Group – which owns Norwich Union, backed the move to shore up the rules around risk management with a view to a continent-wide system. He said: “An overhaul of of the current rules is long overdue for insurers and consumers alike. The commission has shown itself to be truly forward thinking, we must encourage them to maintain the momentum. Click here to read full article (source: ftadviser.com).

 

Nigel Peaple, policy director, National Association of Pension Funds (NAPF), said: “It is of great concern that French Government officials and others, despite all the evidence, continue to pursue an agenda which would lead to the rapid closure of salary related pension schemes across many parts of Europe, including the UK.

Peaple continued: “Company pension funds are different from insurance-based pensions in a number of crucial ways so clearly a different regulatory approach is needed. This is why the EU association for company pensions, EFRP, recently produced a report explaining why pension funds should continue to be regulated under the IORP Directive.”

Click here to read full article (source: globalpensions.com).

The CEA believes that failure to adopt a risk-based approach to the calculation of the minimum capital requirement (MCR) in the European Commission’s proposed Solvency II Framework Directive would perpetuate the disadvantages of the current regulatory system.

”Approaches to calculating the MCR that are not consistent with the overall system could jeopardise the effectiveness of the whole Solvency II regime. The MCR should be appropriately linked to the solvency capital requirement so that both reflect the true risk profile of the insurer,” said Michaela Koller, director general of the CEA, the European (re)insurance federation, who was also speaking today at a London conference on Solvency II organised by the Association of British Insurers (ABI).

Click here to download full press release.