Mexico’s new insurance and surety law came into force on Saturday, giving the country one of the most sophisticated regulatory frameworks on insurance in the world.
The law introduces a three-pillar solvency framework, with pillar I based on capital adequacy and valuation, pillar II on enterprise risk management (ERM), and pillar III on market disclosure.
Despite officially being introduced on Saturday, the quantitative aspects, or everything that falls under pillar I, will not come into force until April 2016, giving insurers more time to adapt to the changes.
Continue Reading “SPOTLIGHT: Mexico’s insurance and surety law” at BN Americas
Insurers must prepare for a wave of new regulation over the next year and at the same time look at how best to serve consumers in an increasingly digitised way, industry leaders and legal experts have said.
Speaking at an industry forum on the future of general insurance distribution organised by Pinsent Masons, the law firm behind Out-Law.com, assistant director of the Association of British Insurers (ABI) Jonathan de Beer identified the Solvency II reforms as a particular challenge that UK insurers will need to address.
Some would describe the EU’s Solvency II framework as “a monster” and there was a concern it has been “over-engineered”, de Beer said, referring to the length of the new legislation and the fact that it has been approximately 15 years in the making.
Continue Reading this story at Out-Law News
Plunging rates on government bonds in Europe are forcing life insurance companies to seek out other asset classes as they must meet obligations on guaranteed insurance policies. Almost half of Storebrand’s asset allocation for guaranteed policies in Norway is invested in hold-to-maturity bonds. As bonds mature, the Oslo-based company must reinvest while finding returns high enough to cover guaranteed rates.
Storebrand, which has 535 billion kroner ($65 billion) under management, has about 11 percent of its customer portfolios, with rate guarantee in Norway, invested in real estate. The average return on real estate in Norway is about 4.8 percent, according to Grefstad. While the company invests in mortgage and corporate bonds mostly from Norwegian and Swedish issuers, it also looks for opportunities from other European issuers that sell in the Norwegian or Swedish currencies.
Continue Reading “Norway’s Storebrand Buys Real Estate, Mortgages to Escape Negative Yields” at Insurance Journal News
The German pensions industry has issued a “clear rejection” of any attempt to standardise solvency requirements across European pension funds, according to Joachim Schwind, chairman of the German Hoechst Pensionskasse and board member at German pension fund association Aba.
At this week’s Handelsblatt occupational pensions conference in Berlin, he pointed out that the holistic balance sheet (HBS) approach was “really a Solvency II concept with additional regulation for occupational pensions”.
As such, he said it was highly complex and increased costs without taking sponsor support into account.
Continue Reading “German pension fund association vows to keep fighting HBS ” at IPE News