The implementation of Solvency II should not be seen purely as a compliance exercise, but instead a tremendous opportunity to build a more effective way of running a company. Insurers who embrace this idea early on stand to gain a significant competitive advantage.

background

The Solvency II project was initiated by the European Commission (EC) in 2000 to implement a fundamental change to the current European insurance solvency framework. It is intended that Solvency II, which will be based on the Basel II three pillar approaches, will produce a more consistent solvency standard across insurers and across the European region whilst also resulting in capital requirements that are more reflective of the risks being run by insurers.

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our latest thinking

article: Building internal models - challenges and issues 

Developing an internal model can be a prolonged and challenging process. However, a good quality model can form an important part of a company’s risk management toolkit. Many companies will want to use internal models for calculating regulatory capital when the European solvency regime (Solvency II) comes into force.

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article: Solvency II – will it change anything? 

As adoption of the Solvency II Framework Directive draws nearer, we consider whether this significant update to the the European (re)insurance solvency regime will really change anything, in particular for UK insurers already operating under the FSA ICAS regime.

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eAlert: Issues Paper - Implementing Measures on System of Governance 

CEIOPS has published an Issues paper on the 4th of November 2008 entitled ‘Implementing Measures on System of Governance’. 

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eAlert: QIS4 summary results and Solvency II update 

On 20 October the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) presented to its stakeholders the main preliminary results of the fourth quantitative impact study (QIS4) and provided a brief update on the Solvency II timetable. Some highlights of the discussion at the stakeholder meeting are set out below.

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press release: Market turmoil highlights MCEV limitations for insurers  

Insurers may look at reassessing their support for market-consistent measurements of financial risk in the light of the current financial turmoil, according to Watson Wyatt.

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