Solvency II News, November 2011
Dear member,
Today we will start with some breaking news. After a long time, we have:
1. The Final Advice to the European Commission about the Equivalence Assessment of the Bermudan Supervisory System in Relation to Articles 172, 227 and 260 of the Solvency II Directive
2. The Final Advice to the European Commission about the Equivalence Assessment of the Swiss supervisory system in relation to articles 172, 227 and 260 of the Solvency II Directive
1. The Final Advice to the European Commission about the Equivalence Assessment of the Japanese supervisory system in relation to article 172 of the Solvency II Directive
There are some interesting weaknesses identified, like the corporate governance and risk management problems in Bermuda.
Important: EIOPA has identified a number of areas where the Bermuda Monetary Authority (BMA) regime would have to be strengthened or addressed in order to be considered equivalent to Solvency II.
These are:
• Stricter provisions around the requirements for key functions. Under Solvency II the key functions of risk, internal audit, actuarial and compliance are required for all firms.
In terms of proportionality, discretion may be exercised in terms of how these functions are fulfilled but not in terms of whether or not they are required for individual insurers.
• Independence of internal audit. Under Solvency II internal audit should be independent of all other functions, whereas in Bermuda it is possible to combine this role with other functions.
• Outsourcing. There are key differences in the supervisory regime in relation to outsourcing, in terms of notification requirements to the BMA as well as the nature and scope of what can be outsourced.
• Public disclosure. The BMA’s current regulation and plans for public disclosure are different from Solvency II in terms of (intended) scope and market reach.
Solvency II is based on a three pillar approach with significant emphasis placed on pillar 3 disclosure requirements.
The BMA considers that a different approach is appropriate with regards to a largely wholesale market. However the distinction between wholesale and retail markets is not made under Solvency II.
It is also considered that captives’ ‘unrelated business’ could include retail business and that these policyholders would be entitled to the same rights of disclosure in an equivalent regime.
Consequently where these rules apply in full (for Groups, Classes 4, 3B, and in some cases 3A) the supervisory regime should be deemed to be partly equivalent with Solvency II.
However with regards to smaller insurers (classes 1 to 3, and in some cases 3A), EIOPA found that the supervisory regime was not applied or intended to be applied to its fullest extent.
In part this was a consequence of the BMA’s view of proportionality. In particular, some of the key differences that EIOPA identified were:
• The application of the proportionality principle for the requirements on the key functions of risk, internal audit, actuarial and compliance would go further than the way it will be applied under Solvency II.
• The requirements for smaller insurers’ own risk and solvency assessments are more limited and do not require them to take account of future strategy.
• There are no plans to include this sector of the market in any future developments with regard to public disclosure.
• The extent of outsourcing that is commonplace in this market is beyond that which would be considered appropriate under Solvency II.
Disapplication of the rules is not consistent with the principle of proportionality as it will be applied under Solvency II. Consequently where there is disapplication of the rules (for classes 1 to 3, and in some cases 3A) the supervisory regime should be deemed not to be equivalent with Solvency II.
1107063135
Today we will start with some breaking news. After a long time, we have:
1. The Final Advice to the European Commission about the Equivalence Assessment of the Bermudan Supervisory System in Relation to Articles 172, 227 and 260 of the Solvency II Directive
2. The Final Advice to the European Commission about the Equivalence Assessment of the Swiss supervisory system in relation to articles 172, 227 and 260 of the Solvency II Directive
1. The Final Advice to the European Commission about the Equivalence Assessment of the Japanese supervisory system in relation to article 172 of the Solvency II Directive
There are some interesting weaknesses identified, like the corporate governance and risk management problems in Bermuda.
Important: EIOPA has identified a number of areas where the Bermuda Monetary Authority (BMA) regime would have to be strengthened or addressed in order to be considered equivalent to Solvency II.
These are:
• Stricter provisions around the requirements for key functions. Under Solvency II the key functions of risk, internal audit, actuarial and compliance are required for all firms.
In terms of proportionality, discretion may be exercised in terms of how these functions are fulfilled but not in terms of whether or not they are required for individual insurers.
• Independence of internal audit. Under Solvency II internal audit should be independent of all other functions, whereas in Bermuda it is possible to combine this role with other functions.
• Outsourcing. There are key differences in the supervisory regime in relation to outsourcing, in terms of notification requirements to the BMA as well as the nature and scope of what can be outsourced.
• Public disclosure. The BMA’s current regulation and plans for public disclosure are different from Solvency II in terms of (intended) scope and market reach.
Solvency II is based on a three pillar approach with significant emphasis placed on pillar 3 disclosure requirements.
The BMA considers that a different approach is appropriate with regards to a largely wholesale market. However the distinction between wholesale and retail markets is not made under Solvency II.
It is also considered that captives’ ‘unrelated business’ could include retail business and that these policyholders would be entitled to the same rights of disclosure in an equivalent regime.
Consequently where these rules apply in full (for Groups, Classes 4, 3B, and in some cases 3A) the supervisory regime should be deemed to be partly equivalent with Solvency II.
However with regards to smaller insurers (classes 1 to 3, and in some cases 3A), EIOPA found that the supervisory regime was not applied or intended to be applied to its fullest extent.
In part this was a consequence of the BMA’s view of proportionality. In particular, some of the key differences that EIOPA identified were:
• The application of the proportionality principle for the requirements on the key functions of risk, internal audit, actuarial and compliance would go further than the way it will be applied under Solvency II.
• The requirements for smaller insurers’ own risk and solvency assessments are more limited and do not require them to take account of future strategy.
• There are no plans to include this sector of the market in any future developments with regard to public disclosure.
• The extent of outsourcing that is commonplace in this market is beyond that which would be considered appropriate under Solvency II.
Disapplication of the rules is not consistent with the principle of proportionality as it will be applied under Solvency II. Consequently where there is disapplication of the rules (for classes 1 to 3, and in some cases 3A) the supervisory regime should be deemed not to be equivalent with Solvency II.
Solvency II News, November 2011
Dear member,
Today we will start with some breaking news. After a long time, we have:
1. The Final Advice to the European Commission about the Equivalence Assessment of the Bermudan Supervisory System in Relation to Articles 172, 227 and 260 of the Solvency II Directive
2. The Final Advice to the European Commission about the Equivalence Assessment of the Swiss supervisory system in relation to articles 172, 227 and 260 of the Solvency II Directive
1. The Final Advice to the European Commission about the Equivalence Assessment of the Japanese supervisory system in relation to article 172 of the Solvency II Directive
There are some interesting weaknesses identified, like the corporate governance and risk management problems in Bermuda.
Important: EIOPA has identified a number of areas where the Bermuda Monetary Authority (BMA) regime would have to be strengthened or addressed in order to be considered equivalent to Solvency II.
These are:
• Stricter provisions around the requirements for key functions. Under Solvency II the key functions of risk, internal audit, actuarial and compliance are required for all firms.
In terms of proportionality, discretion may be exercised in terms of how these functions are fulfilled but not in terms of whether or not they are required for individual insurers.
• Independence of internal audit. Under Solvency II internal audit should be independent of all other functions, whereas in Bermuda it is possible to combine this role with other functions.
• Outsourcing. There are key differences in the supervisory regime in relation to outsourcing, in terms of notification requirements to the BMA as well as the nature and scope of what can be outsourced.
• Public disclosure. The BMA’s current regulation and plans for public disclosure are different from Solvency II in terms of (intended) scope and market reach.
Solvency II is based on a three pillar approach with significant emphasis placed on pillar 3 disclosure requirements.
The BMA considers that a different approach is appropriate with regards to a largely wholesale market. However the distinction between wholesale and retail markets is not made under Solvency II.
It is also considered that captives’ ‘unrelated business’ could include retail business and that these policyholders would be entitled to the same rights of disclosure in an equivalent regime.
Consequently where these rules apply in full (for Groups, Classes 4, 3B, and in some cases 3A) the supervisory regime should be deemed to be partly equivalent with Solvency II.
However with regards to smaller insurers (classes 1 to 3, and in some cases 3A), EIOPA found that the supervisory regime was not applied or intended to be applied to its fullest extent.
In part this was a consequence of the BMA’s view of proportionality. In particular, some of the key differences that EIOPA identified were:
• The application of the proportionality principle for the requirements on the key functions of risk, internal audit, actuarial and compliance would go further than the way it will be applied under Solvency II.
• The requirements for smaller insurers’ own risk and solvency assessments are more limited and do not require them to take account of future strategy.
• There are no plans to include this sector of the market in any future developments with regard to public disclosure.
• The extent of outsourcing that is commonplace in this market is beyond that which would be considered appropriate under Solvency II.
Disapplication of the rules is not consistent with the principle of proportionality as it will be applied under Solvency II. Consequently where there is disapplication of the rules (for classes 1 to 3, and in some cases 3A) the supervisory regime should be deemed not to be equivalent with Solvency II.
Today we will start with some breaking news. After a long time, we have:
1. The Final Advice to the European Commission about the Equivalence Assessment of the Bermudan Supervisory System in Relation to Articles 172, 227 and 260 of the Solvency II Directive
2. The Final Advice to the European Commission about the Equivalence Assessment of the Swiss supervisory system in relation to articles 172, 227 and 260 of the Solvency II Directive
1. The Final Advice to the European Commission about the Equivalence Assessment of the Japanese supervisory system in relation to article 172 of the Solvency II Directive
There are some interesting weaknesses identified, like the corporate governance and risk management problems in Bermuda.
Important: EIOPA has identified a number of areas where the Bermuda Monetary Authority (BMA) regime would have to be strengthened or addressed in order to be considered equivalent to Solvency II.
These are:
• Stricter provisions around the requirements for key functions. Under Solvency II the key functions of risk, internal audit, actuarial and compliance are required for all firms.
In terms of proportionality, discretion may be exercised in terms of how these functions are fulfilled but not in terms of whether or not they are required for individual insurers.
• Independence of internal audit. Under Solvency II internal audit should be independent of all other functions, whereas in Bermuda it is possible to combine this role with other functions.
• Outsourcing. There are key differences in the supervisory regime in relation to outsourcing, in terms of notification requirements to the BMA as well as the nature and scope of what can be outsourced.
• Public disclosure. The BMA’s current regulation and plans for public disclosure are different from Solvency II in terms of (intended) scope and market reach.
Solvency II is based on a three pillar approach with significant emphasis placed on pillar 3 disclosure requirements.
The BMA considers that a different approach is appropriate with regards to a largely wholesale market. However the distinction between wholesale and retail markets is not made under Solvency II.
It is also considered that captives’ ‘unrelated business’ could include retail business and that these policyholders would be entitled to the same rights of disclosure in an equivalent regime.
Consequently where these rules apply in full (for Groups, Classes 4, 3B, and in some cases 3A) the supervisory regime should be deemed to be partly equivalent with Solvency II.
However with regards to smaller insurers (classes 1 to 3, and in some cases 3A), EIOPA found that the supervisory regime was not applied or intended to be applied to its fullest extent.
In part this was a consequence of the BMA’s view of proportionality. In particular, some of the key differences that EIOPA identified were:
• The application of the proportionality principle for the requirements on the key functions of risk, internal audit, actuarial and compliance would go further than the way it will be applied under Solvency II.
• The requirements for smaller insurers’ own risk and solvency assessments are more limited and do not require them to take account of future strategy.
• There are no plans to include this sector of the market in any future developments with regard to public disclosure.
• The extent of outsourcing that is commonplace in this market is beyond that which would be considered appropriate under Solvency II.
Disapplication of the rules is not consistent with the principle of proportionality as it will be applied under Solvency II. Consequently where there is disapplication of the rules (for classes 1 to 3, and in some cases 3A) the supervisory regime should be deemed not to be equivalent with Solvency II.
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Product Details
| BN ID: | 2940013255081 |
|---|---|
| Publisher: | Compliance LLC |
| Publication date: | 11/02/2011 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 22 |
| File size: | 114 KB |
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