ABI response to proposals on solvency II
The Solvency II Directive, which sets a new framework of regulatory requirements for insurers across Europe, has been agreed in Brussels. The Directive adopts new approaches to the valuation of assets and liabilities.
Responding to the agreed Solvency II Directive, Stephen Haddrill, the ABI’s Director General, said:
“The current financial crisis demonstrates the importance of well based prudential requirements and high standards of regulatory supervision. We support the directive, which will ensure that the risk-based approach adapted in the UK over the last five years will now be applied across the EU. This approach has ensured that the UK insurance industry went into the current crisis well capitalised and continues to weather the storm.”
“We are, however, very disappointed that an opportunity has been missed to enhance the regulation of groups that operate across borders. Capital requirements will still be set in each country a firm operates in, and not set centrally by their lead supervisor. The crisis has shown that the lead supervisor for a firm needs to look across boundaries and ensure risks across the group are properly managed and capitalised as a whole.”
“As the De Larosiere report outlined, we need supervision that reflects the cross border nature of businesses. A directive with group support would have been world-leading. This directive is not.”
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