Solvency II is a big and complicated project that will significantly change the way the European and even the global insurance industry is managed. The new rulebook will not be up and running until the beginning of 2013. But the big decisions that will ultimately determine how much and what type of capacity is available for corporate insurance buyers and how captives will be regulated are being taken now as the results of the latest and final quantitative impact assessment—QIS5—are being gathered.
Adrian Ladbury, editor of Commercial Risk Europe, attended the recent European Captive Forum in Luxembourg and interviewed speaker Karel Van Hulle, Head of Unit, Insurance and Pensions, Financial Institutions, Internal Market Directorate General at the European Commission and the architect of Solvency II. Mr Van Hulle conceded that much work still needs to be done to wrap up the project but seemed confident that Europe’s insurance buyers will not find that it makes their job more difficult than it should be, that captives will receive balanced and proportional treatment after all and that the project is nearing the end of its long and sometimes arduous journey. He also discussed other big projects on the agenda at the EC, including the Insurance Mediation Directive (IMD), which could see the creation of a new regime to regulate how brokers are paid and how the often thorny relations with the United States are progressing.
The European Commission has decided to relax its approach to third countries outside the European Union when it decides which can trade with nations that are covered by Solvency II, its planned new capital adequacy regime.
Following a recent report from the European Commission on the Environmental Liability Directive (ELD) that suggests it is considering intervention to help develop an insurance market to address the regime’s liabilities, Phil Bell, Group Casualty Director at Royal Sun Alliance and Chairman of the CEA’s general liability steering group, argues that it should be left to market forces.
Captive owners will have to wait a few weeks longer than expected for the results of QIS 5 but can rest assured that their calls for special treatment compared to commercial insurers have not been ignored.
A recent report from the European Commission suggests that it is looking to beef up the Environmental Liability Directive [ELD] sooner rather than later, in order to plug weaknesses and gaps in the Directive.
Insurers must not waste the opportunity afforded to them by Solvency II to show their value to customers and investors by getting ‘bogged down’ on compliance with the directive, urged Charles Garnsworthy, Partner at PricewaterhouseCoopers, at the Association of British Insurers conference yesterday.
The disaster in Hungary, which has seen toxic sludge escape from a reservoir in the city of Ajka, should serve as a warning to companies with industrial operations in Europe that the Environmental Liability Directive [ELD] will leave no place to hide, according to Aon.
The preliminary findings of the Italian antitrust authority’s probe into motor-liability insurance in Italy suggest that the body may act to increase competition in the sector and potentially restrict motor premium increases due to concerns it has over industry practices.
Initial results from QIS 5, the crucial fifth Solvency II quantitative impact study, show that solvency capital requirements for captives will be very similar to the findings from QIS 4, according to experts who spoke at the FERMA 2010 Risk Management Seminar.
The three European Level 3 Committees of national supervisors – CEIOPS (insurance), CESR (securities) and CEBS (banking) – have welcomed the European Parliament’s decision yesterday to endorse the EU financial supervision reform package.