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
Rather than replacing Solvency II entirely when the UK leaves the European Union, regulators need to refine EU’s insurance regulation to make it more appropriate for the UK market and customers, according to the Association of British Insurers (ABI).
Following more than 10 years of implementation, costing more than £3 billion ($3.7 billion), or the equivalent of £140 ($174.40) per insured household, the ABI noted Solvency II is broadly fit-for-purpose for the UK market and there is no appetite from its members to withdraw from or completely replace it. (The ABI offered its comments in response to the UK Treasury Select Committee inquiry into Solvency II.)
“Solvency II has been part of the UK regulatory landscape and on UK insurers’ radars for almost a decade.
Continue Reading “With Brexit, UK Government Should ‘Refine Not Replace’ Solvency II: Insurers” at Insurance Journal News
In 1688, a gathering of shippers and investors at Edward Lloyd’s coffeehouse in London laid the groundwork for what would become Lloyd’s of London – the most powerful player in the most powerful insurance market in the world. More
than 325 years later, voters in the UK have seemingly threatened that business primacy by voting to exit the European Union.
The surprise decision in late June, popularly known as Brexit, raised questions for the global insurance industry and set the stage for some short-term economic strain on businesses in the US.
The vote quickly sent shockwaves through global markets as the pound plunged to $1.35, its lowest level since 1985. Yet despite that initial cratering, the stock market has quickly recovered.
Continue Reading “London falling?” at Insurance Business News
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
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
The strategic investment fund at the heart of the EU’s Investment Plan for Europe must “step up” its engagement with institutional investors to facilitate more sustainable infrastructure investment, a €13trn-plus coalition of pension funds and asset managers has said.
The Institutional Investors Group on Climate Change (IIGCC) addressed its call specifically to the investment committee of the European Fund for Strategic Investment (EFSI), the EU’s vehicle for implementing what was initially known as the Juncker Plan.
The IIGCC has previously made a series of recommendations to boost investment in renewable energy and other sustainable infrastructure in Europe through the EFSI.
Continue Reading “EU strategic fund urged to ‘step up’ talks with institutional investors” at Investment & Pensions Europe
A powerful committee of UK parliamentarians has launched an inquiry into EU rules for the €8.4trn insurance industry, following the UK’s vote to leave the 28-member bloc.
The Treasury Select Committee said on Tuesday it wanted to examine the so-called Solvency II regime, which came into force at the beginning of the year, to see whether the Brexit vote meant that there were “options” for UK insurers, reports Caroline Binham,
“Brexit provides an opportunity for the UK to assume greater control of insurance regulation,” said Andrew Tyrie, the Conservative chairman of the committee, adding:
Continue Reading “UK parliament launches inquiry into EU’s Solvency II rules after Brexit” at the Financial Times