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
Creditworthiness of European rated insurers is unlikely to be affected when they will have to reveal, for the first time starting in May 2017, the extent to which their Solvency II ratios are enhanced by various measures, including transitionals and long-term guarantee measures, says Moody’s Investors Service in a report published today. The disclosures are part of insurers’ compliance reporting under the new capital regime.
Moody’s report, “Insurers — Europe: New Solvency II disclosure to provide insight, but unlikely to change our credit view,” is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release. The rating agency’s report is an update to the markets and does not constitute a rating action.
Continued Reading “Moody’s: Solvency II regulatory disclosures unlikely to affect European insurers’ credit quality” at EconoTimes
London, 24 March 2017 — Moody’s Investors Service has today assigned a Ba2(hyb) rating to the SEK2.5 billion/DKK650 million perpetual restricted Tier 1 contingent convertible notes (“notes”) to be issued by RSA Insurance Group plc (“RSA” or “Group”; backed subordinated rating Baa1(hyb), stable outlook).
Moody’s approach to rating “high trigger” contingent capital securities is described in its Global insurance rating methodologies (Global Property and Casualty Insurers: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_190302).
The notes rank junior to RSA’s senior creditors (including Tier 2 capital) and existing preference shares, but they rank senior to common shares. Coupons may be cancelled on a non-cumulative basis at the issuer’s option and on a mandatory basis if the Group’s solvency capital requirement is breached.
Continue Reading “Moody’s assigns Ba2(hyb) rating to RSA’s SEK2.5 billion/DKK650 million perpetual contingent convertible notes” at Moody’s
LONDON, March 20 (Reuters) – The Bank of England said it
will devote greater effort to ensuring more consistent
protection for those who would suffer most if their insurance
policies do not pay out as promised. The move follows a review by the central bank’s Independent Evaluation Office (IEO), published on Monday, which looked into
how the BoE’s supervisory arm, the Prudential Regulation Authority (PRA), ensures that policyholders are properly protected. PRA work on the issue had been “crowded out” by “live supervisory issues” and the need to implement European Union capital rules known as Solvency II by January 2016, the IEO said in its report. The PRA’s “articulation of its policyholder protection responsibilities appears to be unfinished business”, although there was no evidence that PRA supervisors were falling short of their duties, the IEO said.
BoE Deputy Governor and PRA Chief Executive, Sam Woods, said the PRA does not seek to protect all policyholders equally and will direct more resources to those who would suffer greater financial hardship if their policies do not pay out as promised.
Continue Reading “British regulator to focus more on protecting insurance policyholders” at Nasdaq News
The National Association of Insurance Commissioners has asked the new Treasury secretary to clarify provisions of the covered agreement reached between the United States and the European Union in response to the bloc’s Solvency II directive.
The covered agreement deal negotiated by the U.S. Department of the Treasury under the Obama administration and the Office of the U.S. Trade Representative, announced on Jan. 13, aims to address the fact that the European Commission has not deemed the United States an equivalent jurisdiction, per the EU’s Solvency II directive outlining a risk-based capital regime for insurers and reinsurers in Europe.
Continue Reading “NAIC asks Treasury secretary to review EU-US covered agreement” at Business Insurance News
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
On the face of it, the insurance covered agreement announced on January 13 should be everything Donald Trump detests. Signed in the final days of Barack Obama’s administration, when Trump had already been elected, the deal is between the US and the European Union – an institution the new president has repeatedly disparaged.
It will pre-empt the authority of individual US state legislators and require them to defer to EU regulation of European insurers in US markets.
On top of that, the agreement was negotiated by the Federal Insurance Office (FIO), an Obama-era creation Republican lawmakers are keen to abolish.
Continue Reading “Deal or no deal? US divided on EU insurance agreement” at Risk.net
here has been plenty of controversy surrounding the EU’s impact on UK insurance laws in recent weeks. Last week we revealed that uninsured drivers are to get compensation under a new EU rule; and now a report has outlined some even more significant consequences of the EU’s regulation.
Annuities have, reportedly, become more expensive as a result of Solvency II – and that means that people are needing to work longer before they are able to retire.
The statement was made as part of a hearing at the Treasury Select Committee on the impact of Solvency II as the industry looks to relax some areas of the regime post-Brexit.
Continue Reading “Are insurance rules making people work longer?” at Insurance Business News