Solvency II news: 28 March 2011

 March 28, 2011

Solvency II simplification, effect of Solvency II on ratings, QIS5 in Romania, insurance regulation in China, tweets

EIOPA calls for Solvency II simplification

Solvency II will have to be simplified before it can be implemented in 2013 according to Gabriel Bernardino, chairman of EIOPA. The directive will also be reviewed to reduce potential volatility, “especially for long-term insurance products,” he told Bloomberg.

Rating of pensions and non-life insurers under Solvency II

Solvency II will have a “broadly ratings-neutral” effect on European insurers and reinsurers Fitch Ratings agency told CPI Financial. A number of the non-life insurers that took part in QIS5 did not meet the current capital adequacy requirements. “Several non-life insurers may fall short of Solvency II capital requirements as currently drafted,” said David Prowse, a Senior Director in Fitch’s Insurance team. “Unless the Solvency II risk charges for non-life business are recalibrated, some non-life insurers may have to recapitalise or reshape their business in order to survive.” The QIS5 results, published on 14 March 2011, also showed that calculation of future cashflows were not treated uniformly by all pension funds. “The agency believes clarification of the intended rules, and potentially some re-runs of QIS5, may therefore be necessary,” Fitch said.

Solvency II in Romania

Solvency II will have little impact on the assets of the Romanian insurance industry. Lasigo.ro reports that the Romanian insurance market comprises mainly smaller companies, therefore “insurers will have to take very quick and effective measures to adapt to new conditions.” 18 Romanian insurers took part in QIS5, representing about 93.9% of gross written premiums for life insurance and 79.8% for general insurance.

From the Sphere

China starts aligning its insurance industry oversight with Solvency II

The Sunguard Blog reports in a two part article, that new guidelines introduced in 2010 by the China Insurance Regulatory Commission (CIRC) mark a shift in China’s insurance industry regulation. Both capital adequacy and reporting requirements are being reviewed to echo Solvency II.

Tweets before posting

LPRisk: The link between insurers and the financial crisis.http://bit.ly/f4BRQ1 cindyMlin: RT @SunGardFS: China brings its #insurance industry oversight further in line with #Solvency Part 2 http://ow.ly/4lENX #tenfs #finreg 2012ORG: technology market European Solvency II Technology Market to Grow to $1.34bn by 2012 http://bit.ly/i1ye4m ]]>