Tag Archives: Capital Rules

Bermuda: Changes to Bermuda Solvency Capital Requirement Postponed

In the light of concerns raised in industry feedback, the Bermuda Monetary Authority (BMA) has decided to postpone the introduction of various adjustments to the Bermuda Solvency Capital Requirement (BSCR) standard formula that were proposed in its November 2016 Consultation Paper.

The adjustments were originally scheduled to be field-tested in 2017 with a view to their implementation for year-end filings for financial years beginning on or after 1 January 2017. They will now be introduced for year-end filings for financial years beginning on or after 1 January 2018. There will then be a three-year grade-in period.

The BMA considers that the adjustments are necessary to bring the BSCR into line with international standards. The adjust­ments include the following:

Read “Bermuda: Changes to Bermuda Solvency Capital Requirement Postponed” at Mondaq News

Mutual LV= weighs merger or disposals as capital rules bite

One of Britain’s largest financial services mutuals has been involved in a secret hunt for a merger partner as a combination of tougher capital requirements and low interest rates hamper its profitability.

dddvtureSky News has learnt that LV=, which has nearly 6m UK customers across insurance, pensions and income protection products, has held aborted talks in recent months with Royal London, its fellow mutual, about a possible tie-up.

Those talks are said to have broken down amid a disagreement over the structure of a deal.

Continue Reading “Mutual LV= weighs merger or disposals as capital rules bite” at Sky News

Solvency II complicates captive strategies

The implementation of Solvency II in Europe has provided an additional risk management tool to owners of European captives, but at a cost, forcing risk managers to re-examine whether they are getting the best use out of their captives.confused-face-484x295

Solvency II, the European Union-wide risk-based capital rules for insurers and reinsurers, came into force in January 2016, and with it came new elements that have affected captives, for better or for worse.

“What we’re seeing as managers is an increased interest in strategic reviews and companies re-examining the captives to explore optimization opportunities and thus potentially…

Continue Reading “Solvency II complicates captive strategies ” at Business Insurance News

PRA says insurers exaggerating Solvency II problems – report

Prudential Regulation Authority (PRA) chief executive Sam Woods has reportedly told parliament that insurance companies are overstating the issues regarding Solvency II.4088135-blow-me-funny-quotes

Woods said on Wednesday before the parliament’s Treasury Select Committee that Solvency II is “basically a sensible regime,” Reuters reported.

However, he admitted that Solvency II, which sets out capital rules for EU insurers, needs some changes.

Continue Reading “PRA says insurers exaggerating Solvency II problems – report” at Insurance Business News

Don’t bank on Solvency II going away anytime soon

It has become a bit of a guessing game trying to figure out why the UK population voted for Brexit: was it immigration, money, sovereignty? 

However, there is anotheraid1947220-728px-get-rid-of-annoying-people-step-1-version-3 meme that has always appeared in the UK’s wrangles with Europe and that is the issue of what people like to call “red tape.”

The view goes that outside the European Union (EU), the UK will be able to jettison many of the rules that it has found inconvenient.

There’s no doubt that many, even those who did not support the Leave campaign, would not weep to see the back of some of the more overbearing EU financial regulations.

Continue Reading “Don’t bank on Solvency II going away anytime soon” at the Actuarial Post

Insurers claim capital rules are harming customers

UK insurance groups have claimed that the latest EU capital regulations are harming customers and distorting markets — and are calling for changes in the way they are implemented.

According to thefrustrated-home-inspector-customers Association of British Insurers, the Solvency II rules, which came into force at the start of the year, have had unintended consequences and a reassessment is needed.

Its comments come in a submission to parliament’s Treasury select committee, which has launched an inquiry into the post-Brexit future of Solvency II in the UK.

When it launched the investigation in September, the committee said it would look at the impact of the rules on customers, the economy and the competitiveness of the UK insurance industry.

Continue Reading “Insurers claim capital rules are harming customers” at Financial Times

A fundamental flaw in Solvency II

In his submission to the Committee of European Insurance and Occupational Pensions (CEIOPS), now known as the European Insurance and Occupational Pensions Authority stop(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

Malta: a gateway to Europe

In a post-Solvency II world and against the backdrop of the UK’s leaving the EU, Malta can offer companies a robust regulatory regime, access to Europe and innovative structures such as protected cell special-malta-wallpapercompanies and ILS, Penny Hudson at Artex Risk Solutions tells Monte Carlo Today.

The attraction and benefits of Malta as a domicile are already established, although the jurisdiction is seeing potential enhancement due to the UK’s planned exit from the European Union as it will reap the rewards of its own EU membership and sustained investment in its regulatory regime, infrastructure and education system needed to support its fast-growing financial services sector.

That is the view of Penny Hudson, director and head of the Malta office at Artex Risk Solutions, the specialist in insurance management and alternative risk programmes.

Continue Reading “Malta: a gateway to Europe” at Intelligent Insurer News


Worldwide: There is life after Brexit

In the eve of the EU Referendum I published a briefing note about the potential Brexit impact on the Gibraltar insurance industry (entitled “what could Brexit mean?”). This update is intended to provide further commentary now that the 1456234290-31vote is over.

There is no reason to believe that following the resignation of David Cameron as Prime Minister, his successor will not put in motion the formal process for the UK’s exit from the European Union. That formal process will commence with the UK’s notification to the European Council of its intention to withdraw in accordance with Article 50 (the exit clause) of the Treaty.

It is important to emphasise, however, that EU law does not immediately cease to apply in the UK (or Gibraltar) as a result of the outcome of the Referendum. Following the notification, the UK Government has two years within which to negotiate its exit arrangements with the EU.

Continue Reading “Worldwide: There is life after Brexit” at  Hassan’s International Law Firm

Solvency II rigors open P/C doors to specialty insurers

LONDON, (Reuters) — Hit by tougher regulation and lower investment income, European insurers are looking to sell portfolios of general insurance business closed to new customers, such as employers’ liability, medical negligence and motor policies.opendoors

The rise in capital buffers demanded by the Solvency II rules that took effect in January has prompted consolidation in the life and pensions market, but insurers are increasingly seeking to offload closed non-life business to specialist players.

“The stream of transactions has grown because of the activity around Solvency II,” said Arndt Gossmann, chief executive of German insurer Darag A.G., referring to a European non-life sector that consultancy Pricewaterhouse Coopers estimates to be worth about 250 billion euros ($284 billion).

Continue Reading “Solvency II rigors open P/C doors to specialty insurers” at Business Insurance News