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.
Top annuity firms turning to transitionals
Few UK annuity firms that can make use of the Solvency II matching adjustment were expected to apply to use transitional measures. Cuts and bruises on the path to regulatory approval have led many to change that view
UK wrong on volatility adjustment, says Insurance Europe
Olav Jones weighs in to debate that could see Eiopa overrule PRA
Eiopa infrastructure plans too conservative, says industry
Regulator proposes to cut infrastructure debt and equity charges, but insurers say proposals do not go far enough
Mandate for change: asset management after Solvency II
European insurers are adjusting their investment portfolios ahead of Solvency II, while asset managers are looking to offer support services required by the directive. But there is still some confusion over the allocation of key responsibilities
The dangers of herd behaviour
Policy-makers should take note of flaws being pointed out in capital rules
Supervisors fret over grasp of prudent person rule
As insurers increase investment in non-traditional assets, some regulators are worried that too few are taking Solvency II’s prudent person principle on board. Clive Davidson reports
Q&A: Avinash Persaud on the structural risk in Solvency II
By herding insurers away from assets seen by regulators as ‘born with original sin’, Solvency II will create systemic risk, says Avinash Persaud, author of a new book, Reinventing Financial Regulation. Already the effects are being felt in negative…
Profile: Aviva's capital planning after Friends Life takeover
Aviva’s purchase of Friends Life promises as much as half-a-billion pounds in capital savings. Capital management director Marcus Bowser’s job is to make sure they happen. Insurance Risk asks how he plans to do it
Flawed reliance on VAR a systemic risk for insurers
Solvency II is a great achievement but it is not without its weaknesses, says risk management writer and consultant René Doff. Chief among them is the overreliance on a single approach to measuring risk
Backtesting Solvency II value-at-risk models using a rolling horizon
The author of this paper performs an analysis on a review of the equity stress parameter for Dutch pension funds.
Patchy Solvency II implementation worries US regulator
Consistency might take time, says NAIC’s head of international regulatory affairs
Danish insurance association calls for daily discount curves
Local regulator commits to cover gaps in Solvency II information from Eiopa
‘Fairness not part of Solvency II’ – Danish regulator
Directive ignores risk of intergenerational subsidy, says Finanstilsynet's Parner
MetLife CEO lambasts regulators over Sifi designations
Systemically important label is "our biggest concern", says Kandarian
Do insurers need a CIO?
The UK regulator has proposed five ‘controlled function holders’ for insurers without including a chief investment officer. But the role is too important to overlook, says Scott Eason of Barnett Waddingham
Credit risk weighs more on planet S-II
A rise in government bond yields in May failed to lift insurance stocks. The parallel increase in credit spreads offers a possible reason why.
Maltese insurers grapple with Pillar 3 requirements
Maltese firms face an uphill battle to comply with Solvency II by the January 2016 deadline, survey finds
UK firms prep Vif hedging options
Unit-linked providers reviewing ways to maximise benefit of new rules
PRA could be more flexible on matching adjustment collateral
The PRA’s rigid view on posting collateral from matching adjustment portfolios is mistaken, says Simeon Rudin of Freshfields Bruckhaus Deringer, forcing firms to repaper trades with no tangible benefit for policyholders
Q&A: Eiopa approach wrong on government bonds, says Ivass director
Modelling sovereign risk should not be a Pillar 1 requirement, says Alberto Corinti, member of the board of directors of Italian regulator Ivass, in an exclusive interview with Risk.net
Why insurance regulators are split on sovereign risk
Regulators in Europe disagree over whether and how internal model firms should be modelling sovereign risk. As one CRO puts it: ‘It depends which side of the Alps you are on’
Firms struggle to replicate Eiopa volatility calculations
Insurers are unable to accurately forecast key regulatory numbers
Q&A: Standard Life's Singh on changes in risk management
Standard Life’s Raj Singh was one of the early pioneers of risk management in insurance and has seen the role change from controlling the business to supporting growth. Here he talks about that evolution, and the challenges he faces as Standard Life…
A paradigm shift on sovereign risk
Opinions changing on capital treatment of government bonds