Business and financial adviser Grant Thornton has said its research shows that support for Solvency II has waned over recent years in the UK insurance community.
Grant Thornton found only a quarter of its sample of 77 senior executives thought Solvency II was clearly the best way to run their business, down from 31% in a similar survey in 2014.
Almost all of them, 91%, felt Solvency II principles were appropriate, but nearly 70% thought these had been ruined by the implementation of the regime.
Two-thirds thought Solvency II was too complicated and a similar proportion that it used up resources that could be better deployed elsewhere.
Continue Reading “Support weakens for Solvency II in UK insurance” at The Actuary
PensionsEurope has responded to Norwegian plans to introduce solvency capital requirements for pension funds to reiterate warnings on the detrimental effect of such requirements and again point to IORP II statements against the further development of solvency models for pension funds.
Commenting on Norwegian government plans to introduce a simplified Solvency II requirement for pension funds in January 2018, the umbrella association for national workplace pension bodies warned against solvency capital requirements for pension funds – be they at national or EU level – as they would have significant negative consequences.
Continue Reading “PensionsEurope seizes on Norway plan to warn against solvency rules” at IPE Investment & Pensions Europe
In his submission to the Committee of European Insurance and Occupational Pensions (CEIOPS), now known as the European Insurance and Occupational Pensions Authority (EIOPA) consultation of 2009, on the Level 2 implementation of the risk margin, Dutch actuary Hans Waszink drew attention to a fundamental flaw in the proposed formula.
In particular, he pointed out that, in certain conditions, the risk margin could be even higher than the solvency capital requirement (SCR) itself.
This incongruity had been of little practical significance in most situations, but in the current low interest rate environment and for long-duration obligations such as longevity it can, and does, produce very anomalous outcomes.
Continue Reading “A fundamental flaw in Solvency II” at The Actuary News
The European Insurance and Occupational Pensions Authority (EIOPA) has published a work plan outlining the strategic direction of its activities over the next three years, from 2017 to 2019.
The strategy is set out in a single programming document (SPD), developed in accordance with European Commission requirements to enhance consistency and comparability across European Union bodies.
The SPD specifies the tasks EIOPA is mandated, and required, to undertake, as well as its strategic objectives and pensipriorities for 2017.
Continue Reading “EIOPA sets out strategic direction of activities for next three years” at The Actuary News
U.S. regulators recently revealed that they are closing in on a deal with the European Union (EU) that could throw the door wide open for U.S. insurers looking to do business in Europe.
On Tuesday, the Treasury Department and Office of the U.S. Trade Representative announced that progress has been made toward creating a covered agreement with the EU.
Under a covered agreement, America’s insurance regulation could be viewed as equivalent to European oversight, allowing U.S. insurers to operate in the region with little issue.
Under the EU’s current Solvency II insurance regime, jurisdictions not deemed equivalent face more stringent regulation from the bloc’s member countries.
Continue Reading “Deal between US and EU on insurance regulation draws closer” at Insurance Business News
The European Insurance and Occupational Pensions Authority (EIOPA
) published today an updated technical documentation on the methodology to derive the risk-free interest rate term structures (RFR) for Solvency II
The changes were required in the following areas:
- The update of the representative portfolios to calculate the volatility adjustments (VA) on the basis of more up-to-date and granular data on the investments of the European (re)insurance companies. This update was announced on 1 July 2016, see here.
- The peer country for Cypriote government bond yields used for the calculation of the volatility adjustments and the fundamental spread was changed from Greece to Portugal.
Continue Reading “EIOPA publishes updated technical methodology documentation for risk-free interest rate term structures for Solvency II” at EIOPA
The Subcommittee on Housing and Insurance of the House of Representatives Committee on Financial Services held a hearing yesterday to discuss on U.S. engagement on insurance issues with the European Union (EU).
The hearing, entitled The Impact of US-EU Dialogues on U.S. Insurance Markets, was called to bring Congress up to speed on the current US-EU dialogue and how it affects America’s insurance markets.
At the forefront of the hearing was the issue of the EU’s implementation of its Solvency II insurance regulatory regime.
Continue Reading “Industry heavyweights consider US-EU regulation on the insurance industry ” at Insurance Business America
The debate about the solvency ratio for medical aids is nothing new.
The legislated requirement of 25% needs to be revisited to move away from the one-size-fits-all scenario.
The Medical Schemes Act No 131 of 1998 requires that medical schemes, “shall at all times maintain its business in a financially sound condition”.
This means that the medical scheme has sufficient assets for generally conducting it business, providing for its liabilities at all times and for meeting prescribed solvency requirements of 25%.
Officials from the United States and the European Union are on the verge of completing a “covered agreement” for regulatory approaches to insurance, according to a joint statement released Tuesday by negotiators.
“Both sides continued to discuss in good faith matters relating to group supervision, exchange of confidential information between supervisory authorities on both sides, and reinsurance supervision, including collateral,” the statement said.
“U.S. and EU representatives made progress on key issues, and identified next steps toward a possible completion of negotiations in the near future.”
Steve Simchak, director of international affairs at the American Insurance Association, said the industry group is “encouraged” by the progress.
Continue Reading “EU, U.S. Say They’re on Track to Completing Insurance Agreement” at Morning Consult News
Insurers say they are encouraged by the most recent developments in the covered re/insurance agreement negotiations between the United States and European Commission.
Following the latest round of the talks, held Sept. 21-22 in Washington, D.C., the United States and European Union released a joint statement citing progress.
“Both sides continued to discuss in good faith matters relating to group supervision, exchange of confidential information between supervisory authorities on both sides, and reinsurance supervision, including collateral,” the joint statement said.
Continue Reading “Insurers Encouraged by Latest Round of Covered Agreement Talks” at Insurance Journal