Solvency II
WHAT IS THIS? Europe’s Solvency II directive came into effect in 2016, putting risk at the heart of a harmonised prudential framework for insurance firms. Similar in outline to the banking industry’s Basel standards, Pillar 1 sets out quantitative requirements; Pillar 2 tackles risk management and governance; Pillar 3 addresses transparency, reporting and public disclosure.
The liquidity gap
Regulators are increasing their focus on liquidity risk in response to the financial crisis, but there are questions about whether capital is an effective mitigant for liquidity risks and the nature of the relationship between liquidity risk and bank…
Solvency abuse
Giovanni Cucinotta, head of research at Italian insurance regulator Isvap, talks to Alexander Campbell
The finishing line is in sight for the Solvency II directive says Ceiops chair, but issues remain
An interview with Gabriel Bernardino, chairman of Ceiops
Searching for stability
Alexander Campbell talks to Tom Wilson, chief risk officer at Allianz
Confidence crunch
Many financial institutions calibrate their required level of economic capital by considering the probability of default associated with a target debt rating. However, as the financial crisis has shown, confidence in a bank can erode before its Tier I…
Remuneration controls in Solvency II ‘unjustified’
Proposals to include measures relating to remuneration policy as part of the Solvency II directive have been slammed by Spanish mutual insurer Groupama, which described the initiative as “unjustified interference in company management”.
Different degrees
Solvency II will require a massive upgrade in insurers’ technological capability. But as the deadline for implementation looms ever closer, not all in the industry have made the same level of progress.
The hybrid split
Insurers’ capital management has relied heavily on hybrid debt over the last decade – a strategy that has come under threat from Ceiops' latest Solvency II proposals. Aaron Woolner reports
Pensions puzzle
Senior politicians in Brussels are calling for Solvency II to be extended to incorporate occupational pension schemes. But actuaries and other solvency experts say this would be a disaster for plan sponsors and members. John Ferry reports
Fit to size
The one-size-fits-all approach of Solvency II's standard formula has left insurers with a dilemma. Should they use a standard model that is not appropriate to their business strategy, or opt for an internal model that is expensive and time-consuming for…
IAIS confirms ambition to develop global Solvency II standard
At least 17 national insurance supervisors have signed on to plans for an internationally harmonised regulatory insurance standard similar to Solvency II, the International Association of Insurance Supervisors (IAIS) has confirmed.
Reinforcing regulation
Carlos Montalvo Rebuelta, secretary-general, Ceiops, talks to Rob Davies