Solvency II negotiations are underway again in response to the release of technical guidance from EIOPA, and following the assessment of various calibrations for the treatment of long term guarantee products under Solvency II. There appears to be strong political will to achieve a conclusion to the deliberations and to do so before the European Parliamentary elections in June 2014.
Despite the uncertainty with certain aspects of the capital requirements, EIOPA have released guidelines for Supervisors to follow from January 2014 which are based on Solvency II principles. Many supervisors can be expected to start enforcing Solvency II governance and risk management procedures (including ORSA), as well as disclosure requirements in place from 2014, in line with these EIOPA guidelines.
Drawing on our work with insurers and supervisors on the practical application of the directive, PwC helps business to simplify and accelerate implementation, and tackles the strategic as well as the technical challenges of Solvency II.
PwC is also working closely with insurers in other jurisdictions — Bermuda, Switzerland, Japan, South Africa, Australia, Singapore, China, and the US amongst other leading global insurance centres — on how to deal with the implications of Solvency II for businesses located there.
On 21 - 24 June 2013, PwC Singapore hosted a visit by former Head of the European Commission’s Insurance and Pensions Unit, Professor Karel van Hulle. The professor recently retired from his post in February 2013 after 29 years in the Commission, where he was a key architect in the development of Solvency II and an active voice in many important regulatory debates occurring post-financial crisis. During his four-day stay in Singapore, Professor van Hulle attended various PwC client meetings and chaired external and internal insurance roundtables. In discussions with PwC Singapore’s Insurance Leader Roy Clark and Associate Director of financial services Radish Singh, he reflects on Solvency II and the future outlook of the insurance industry.
Professor van Hulle explains the reasons behind the delays of Solvency II as well as some of the challenges and impending developments in the industry that insurers need to be mindful of in this time of high regulatory change. He also stresses that cross-border cooperation is imperative to ensure the stability of the market as a whole.
The professor highlights that sustaining long-term guarantees may be seen as a pressing concern by the industry, but he believes that this presents a variety of new opportunities for insurers as well.
Prior to his role in the Insurance and Pensions Unit, Professor van Hulle served in the Commission as Head of Unit in three other departments – Accounting Standards, Financial Reporting & Company Law, and Accounting & Auditing. Having a wealth of experience in banking as well as insurance, the professor shares his insights on how both sectors are correlated and the impacts of the financial crisis on the insurance industry.
Watch a discussion exploring how insurance regulators are actively working on a range of insurance directives in addition to Solvency II.
Solvency II timings
We discuss the October Parliamentary vote on Solvency II timing and and the impact on the insurance industry.