Deloitte Partner expresses concern: Are the regulators ready for Solvency II?

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Posted on 19th May 2015 by Solvency 2 News in Europe |UK

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Glenn Gillard, a Financial Services Partner at Deloitte, speaks about the implementation of Solvency II, Base Erosion Profit Sharing (BEPS), and conduct regulations that could affect insurers in the near future.7738960_f520

The final phase of preparing for Solvency II is coming to an end said. Mr. Gillard believes the current challenges surround what is going to be delivered, especially around Pillar III and quantitative reporting. On the governance side, preparations concern installing Solvency II as part of “business as usual, proving the use test and ORSA capital models.”

Continue Reading ” Deloitte Partner expresses concern: Are the regulators ready for Solvency II? ” at World Risk and Insurance News

BoE says UK insurers will need more time to meet EU solvency rules

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Posted on 15th May 2015 by Solvency 2 News in Europe |UK

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Britain’s insurers will need more time to comply fully with new European Union capital rules that come into force next January, the Bank of England has said.need-more-time

Andrew Bailey, who heads the BoE’s supervisory arm, the Prudential Regulation Authority (PRA), said implementing the Solvency II rules is his single biggest task this year.

The reform aims to ensure that insurers such as Prudential (PRU.L), Aviva (AV.L) and the Lloyd’s of London insurance market hold enough capital to meet policy commitments that stretch out for decades in some cases.

Continue Reading “BoE says UK insurers will need more time to meet EU solvency rules” at Reuters News

 

 

Solvency II Might Hit Demand for U.S. ABS: B of A Merrill

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Posted on 15th May 2015 by Solvency 2 News in Europe |UK

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It’s not clear how much capital European insurers will need to hold against their investments in U.S. securitizations or whether they can even invest in so me of these deals at all.BANK_america-2

That’s the view of analysts at Bank of America Merrill Lynch, who put out a report Monday on the regulation Solvency II.

They’re scratching their heads over the regulatory treatment for insurers investing in U.S. deals either directly or through funds holding asset-backeds.

Continue Reading “Solvency II Might Hit Demand for U.S. ABS: B of A Merrill” at National Mortgage News

UK insurance companies to blink first in capital-raising game

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Posted on 15th May 2015 by Solvency 2 News in Europe |UK

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LONDON, May 15 (IFR) – UK insurers could be among the first to go ahead with raising new-style Tier 1 debt, though any issuance is unlikely to open the floodgates as well-capitalised borrowers shy away from what will be an 175034-cats-cat-blinkingexpensive part of their capital stack.

In a supervisory statement published at the end of April, the UK Prudential Regulation Authority laid out the characteristics capital instruments need to have in order to be classified as capital, laying the ground for potential issuance.

“Since the PRA detailed its requirements, a UK insurer could be among the first to issue Tier 1 capital under the new guidelines,” said Filippo Alloatti, senior analyst at Hermes Investment Management.

Continue Reading “UK insurance companies to blink first in capital-raising game” at Reuters News

UPDATE 1-German insurers may struggle to meet capital needs – regulator

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Posted on 12th May 2015 by Solvency 2 News in Europe |UK

FRANKFURT, May 12 (Reuters) – German insurers may struggle to meet new Solvency II minimum capital requirements, supervisor Bafin warned on Tuesday, saying it was preparing to regulate Girl struggling with outstretched handsome companies more closely should low interest rates weigh further on the sector.

“German insurers will successfully enter the world of Solvency II only with considerable efforts,” Bafin head Felix Hufeld said. “Should rates remain so low, we’ll have to take more companies under man-to-man coverage.” With yields on some government bonds — staple investments for insurers — in negative territory, the International Monetary Fund (IMF) warned in April of “high and rising” danger to weaker mid-sized European life insurers.

Continue Reading “UPDATE 1-German insurers may struggle to meet capital needs – regulator” at Reuters

Insurers’ dividend growth in doubt amid solvency worries

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Posted on 11th May 2015 by Solvency 2 News in Europe |UK

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FRANKFURT/LONDON, May 11 (Reuters) – Expectations of rising dividends and share buybacks from Europe’s insurance companies are fading as ultra low interest rates make it harder for themGood-Stocks-To-Invest-In-Dividend-Stocks to meet new capital regulations.

Rock-bottom interest rates reduce insurers’ investment returns, raising the risk of them having to eat into capital reserves to pay policyholders.

With yields on some government bonds — staple investments for insurers — turning negative recently, the International Monetary Fund (IMF) warned last month of a “high and rising” danger to weaker mid-sized European life insurers.

Continue Reading “Insurers’ dividend growth in doubt amid solvency worries” at Reuters News

We need €2 million more for Solvency II, says EIOPA

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Posted on 11th May 2015 by Solvency 2 News in Europe |UK

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EIOPA said it required 10 full time staff members and more than €2m (£1.4m) in order to fulfil its duties for the Solvency II implementation. Earlier this year the authority announced its budgetshutterstock_188997848 for 2015 was reduced to €19.9m (£14.3m).

According to its report, which provided the European Parliament, the Council and the Commission with an assessment of its staffing and resource needs, EIOPA said it needed the extra funding to undertake tasks such as risk-free interest rate calculation, completing its annual report on long-term guarantees and implementing EIOPA’s information and IT infrastructure.

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Strength in diversity should be the future of regulation

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Posted on 10th May 2015 by Solvency 2 News in Europe |UK

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Without regulatory competition there will be much less discipline on politicians. One of the most dangerous trends in financial services is the centralisation of regulation at the international level.Birds

This is happening not just within the European Union but also under the guise of other international agreements such as the Basel Accord. It is often thought that such centralisation can promote free trade as there are fewer trade barriers in the form of regulation and also prevent so-called regulatory arbitrage whereby financial institutions look for the lightest form of regulation.

Both these assumptions are highly questionable. Indeed, at the EU level, it is perfectly possible to develop a single market in financial services and the free flow of capital without harmonising regulation that was the original intention.

Continue Reading “Strength in diversity should be the future of regulation” at The Telegraph News

Creating Opportunities The Role of Convertible Bonds in a Solvency II world

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Posted on 7th May 2015 by Solvency 2 News in Europe |UK

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Solvency II in context

Before looking at the impact Solvency II can have on investment portfolios, it is perhaps helpful to briefly review the regulations themselves and what they seek to achieve.BMW-4-Series-Convertible-01

At a basic level, Solvency II seeks to ensure the harmonization of the European legislative framework for insurers. Its key objectives are to improve customer protection and introduce a new supervision process that manages all risks facing insurers’ organizations. The regulations are divided into three distinct pillars covering capital requirements (pillar I), governance and supervision (pillar II) and disclosure and reporting (pillar III).

Of these, changes to capital requirements are particularly important given a focus on the asset side of insurers’ balance sheets. The implication of this is that insurers will need to collaborate closely with their asset managers to meet these more stringent regulatory requirements, as the imposition of capital charges on investments will ultimately impact the way most asset classes can be used.

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Low Interest Rates Pressuring European Insurers

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Posted on 6th May 2015 by Solvency 2 News in Europe |UK

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Low interest rates are taking their toll on some European insurers as they prepare to implement more stringent capital regulations being introduced by the European Union.Rear_Entry_Pressure_Gauge_(1)

Results from three of the continent’s largest insurance companies Wednesday showed how low or negative yields are having an uneven effect, forcing some companies to change their strategies.

Tidjane Thiam, the outgoing chief executive of Prudential PLC, who is leaving to run Credit Suisse Group AG, warned about the “headwinds” of low long-term rates and said that his priority since 2008 has been to reduce the company’s reliance on rates for its earnings.

Continue Reading “Low Interest Rates Pressuring European Insurers” at The Wall Street Journal