General Insurance Article - European Reinsurers can claim capital credit from Guernsey


Guernsey reinsurance works for EU-domiciled insurers and allows them to take credit in capital calculations for reinsurance under Solvency II regulations.

 The Guernsey industry has consistently explained to European insurers that there are common misunderstandings of Solvency II regulations, which has constrained the development of the reinsurance sector in the island.

 Speaking at Guernsey Finance’s ILS Insight event in Zurich, Jason Noronha, Head of Actuarial and Analytics at Aon, who heads the firm’s non-life insurance actuarial consulting team, clarified the regulations. He said that there was “still a lot of confusion in the market”.

 He stated that credit would be granted for reinsurance in firms’ capital calculation for European-domiciled insurers who have bought from a non-equivalent regime (also referred to as a third country), such as Guernsey, if the entity is rated triple-B or above or collateralised.

 “If a reinsurance contract is fully collateralised, as long as the requirements are met, you can take full credit,” he said.

 “There is no reason why an EU-domiciled insurance company should not be able to benefit from reinsurance from a non-equivalent domicile – that is, one operating in Guernsey. There is no reason why the benefit of that reinsurance should not be recognised under the Solvency II capital calculation.

 “Solvency II is complex and open to interpretation, so some views won’t agree – but there is no real restriction on the use of non-equivalent domiciled reinsurance, as long as there is some mitigation in place, such as a credit rating or collateral.”

 Dominic Wheatley, Chief Executive of Guernsey Finance, said: “This is welcome confirmation of the island’s position with regards to Solvency II and reinsurance.

 “Guernsey’s diverse insurance industry provides a flexible, responsive regulatory regime outside of the EU, which is quicker, less prescriptive and more flexible than Solvency II. We distinguish between different classes of insurer and place proportionate regulatory burdens on each.”

Back to Index


Similar News to this Story

Hit by wild animal car insurance claims on the rise
Three fifths (57%) of drivers have taken evasive action to avoid a collision with a wild animal on British roads, according to a new study by AA Insur
Motorists missing savings by not embracing telematics
A survey conducted by Redtail Telematics and YouGov has revealed that as annual premiums rise and recent research highlights that motorists are being
Any in car distraction is a risk to young motorists
insurethebox responds to the proposals published today by the Transport Select Committee relating to the use of mobile phones in cars. insurethebox R

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.