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.
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
Prudential Regulation Authority (PRA) chief executive Sam Woods has reportedly told parliament that insurance companies are overstating the issues regarding Solvency II.
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
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 another 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
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 the 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
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
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 companies 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
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 vote 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
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.
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
By Carolyn Cohn
LONDON, June 16 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.
The rise in capital buffers demanded by the Solvency II rules that took effect in January has already 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, referring to a European non-life sector that consultancy PwC estimates to be worth about 250 billion euros ($284 billion).
Continue Reading “Specialist players ready to pounce as insurance sell-off gathers pace” at Reuters