Pensions: IORP II and the elephant in the room

After almost two years of negotiation, the revised European Union Directive on the Activities and Supervision of Institutions for Occupational Retirement Provision (IORP II) comes into effect today.newPic_4681_jpg_3388340b

Member States will now have two years to incorporate it into national law.

But what is IORP II? How will it impact on occupational pension provision in the UK? And what about the elephant in room – Brexit?


IORP I came into effect in 2003, and lays down rules for activities carried out by IORPs (which, in the UK, are broadly employer-funded occupational pension schemes).

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AIA Hails Covered Agreement; Will Benefit Insurers on Both Sides of the Atlantic

The American Insurance Association hailed the successful completion of a covered agreement on insurance and reinsurance prudential measures between the United States and European Commission. The agreement establishes mutual indexacknowledgement of prudential supervision in the European Union and the United States, which will eliminate the increasing barriers to U.S. groups operating in Europe.

The Treasury Department’s Federal Insurance Office (FIO) and the U.S. Trade Representative (USTR), which represented the U.S. in the negotiations, will now consult with and submit the agreement to four Congressional committees (House Financial Services, House Ways and Means, Senate Banking and Senate Finance) on a day when all committees are in…

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When insurance pays dividends…..Distribution of long-term insurance profits

On 30 December 2016, the Companies Act 2006 (Distributions of Insurance Companies) Regulations 2016 (the “Regulations“) came into force. The Regulations apply to distributions made on or after that date by reference to accounts prepared for any period ending on or after 1 January 2016. dividends

A copy of the Regulations is available here. The purpose of the Regulations is to define the mechanism by which long-term insurance companies are required to calculate amount of their distributable profits, following the implementation of certain changes arising from the Solvency II Directive.

Continued Reading “When insurance pays dividends….. Distribution of long-term insurance profits ” at Lexology

Strong pipelines underpin uplift in de-risking market

Strong pipelines, greater engagement from smaller schemes and innovation driving improved buy-in affordability are some of the key developments expected to feature in the de-risking market in 2017, according to Willis Towers Watson.

EurosThe firm is predicting that over £30bn of liabilities will be insured in 2017, through buy-ins, buyouts and longevity swaps. This is a significant year-on-year increase, returning to the levels of activity observed in 2014 (£39bn) and 2015 (£18bn), following a slower 2016 (£11bn) as participants allowed for the bedding-in of Solvency II, back books distracted some market participants from new pensions transactions and events such as the referendum caused uncertainty and headwinds across the market.

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NN Group and Delta Lloyd agree on recommended transaction

NN Group and Delta Lloyd announce today that a conditional agreement (the ‘Merger Protocol’) has been reached on a recommended public offer (the ‘Offer’) to be made by NN Group for the entire issued and outstanding ordinary share capital of Delta Lloyd (the ‘Shares’) for EUR 5.40 in cash per ordinary Delta Lloyd share (cum dividend) (the ‘Offer Price’).delta_lloyd

This announcement follows constructive interactions between the boards and management teams of both companies including a period of targeted due diligence. Lard Friese, CEO of NN Group: ‘Today’s announcement is a significant step in our journey to build a sustainable, profitable business for the future, and to strengthen our leading position in the Netherlands and Belgium. I value the entrepreneurial spirit, customer focus, the commercial agility, and strong distribution capabilities of Delta Lloyd.

Continue Reading “NN Group and Delta Lloyd agree on recommended transaction” at NASDAQ Globe News Wire

Anthony Hilton: Relax the rules to give our insurers a chance

The season of goodwill has been characterised this year by a distinct lack of goodwill between the insurance industry and those who regulate it.relax-05

Ever since the Treasury Select Committee decided to investigate how Brexit might affect the industry and how it is regulated, the insurers have closed ranks to complain.

The regulatory problem has recently become more pressing because of developments in the US.

If President-elect Trump fulfils his promise to scale back the Dodd-Frank Act, the centrepiece of US post-crisis banking regulation, it will free up the investment banks to become active traders again on their own account.

Continue Reading “Anthony Hilton: Relax the rules to give our insurers a chance” at Evening Standard

Great expectations: The pensions market in 2017

Sammy Cooper-Smith, co-head of business development, David Land, chief investment officer, and Graham Butcher, chief underwriting officer at Rothesay Life – named insurer of the year at the Buy-Side Awards 2016 – expect de-risking and money-pensions_1974994bbuyout volumes to soar in the new year.

What are your expectations for the pensions de-risking market in 2017?

Rothesay Life: It looks as if it will be a busy year, with volumes – excluding insurer-to-insurer deals – surpassing those of 2016. 

Buyout volumes specifically, as in the full settlement of schemes, should be higher as we see a continued desire for sponsoring employers to settle a liability they have little control over and remove volatility from their balance sheets.

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Law firms highlight potential issues with UK’s draft ILS regulations

As the UK government continues to develop and advance its ambition of turning London into a global hub for insurance-linked securities (ILS) business, international law firms have highlighted some uncertainties and potential shortcomings of the new guidelines.index

The establishment of an ILS hub in the United Kingdom has the potential to expand the reach and influence of the ILS marketplace, while increasing the relevance and position of London as a global hub for insurance and reinsurance business.

Fist discussed in March 2015, the UK Treasury has now published its draft proposals for the framework, with the UK’s financial regulators, the Prudential Regulation Authority (PRA) and the…

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What Brexit and Trump mean for compliance

Regulatory requirements across all industries are constantlytrump evolving. Rules are also becoming increasingly intricate because of the overlap involving multiple nations and jurisdictional specifics.

Both the Brexit vote and Trump’s victory have added further uncertainty about the future, leaving CIOs and IT managers in a minefield of business risks and with the responsibility to ensure their companies comply with changing legislation.

The UK voted to leave the European Union on 23 June, but will remain a member but will remain a member until the conclusion of the withdrawal – at least 2019.

Continue Reading “What Brexit and Trump mean for compliance” at Information Age

Time to scale back the role of insurance regulators?

Is it possible for regulators to become too heavily involved in the insurance business? One giant of the UK insurance sector seems to think so. Legal & General has accused a regulator of becoming increasingly interventionist in their control of the industry law-11believing that their role should be cut back.

Specifically, it highlighted the position of the Prudential Regulation Authority (PRA) in relation to Solvency II rules stating that it is “effectively overruling the judgment of the board” in relation to setting capital requirements; and that it has started to take an increasingly “directive” approach in regards to transaction approval.

“Boards do not feel empowered to make commercial decisions without reference to the regulator,” it said in a submission to the Treasury Select Committee.

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