Solvency II
Solvency II on pensions – a necessary evil?
Posted on 30-04-2012 by Celene Lee | 0 comments
In February 2012, the European Insurance and Occupational Pensions Authority (EIOPA) published its final response to the European Commission’s Call for Advice on the review of the IORP Directive 2003//41/EC, now commonly known as ‘Solvency II on pensions’.
Much of the subsequent debate revolves around a possible increase in pensions funding and compliance costs - for defined…
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A comparison of alternative risk capital definitions
Posted on 07-03-2011 by John Hibbert | 0 comments
There is no universal definition for risk capital. European early adopters of risk-based capital methods (including Solvency II) have adopted a measure which requires sufficient capital to remain solvent (on a market-consistent basis) with 99.5% confidence at a 1-year horizon. In the US, firms and regulators have leaned towards a quite different measure which depends on the behaviour of the balance…
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On Active Markets & the Solvency II ‘DLT’ definition
Posted on 28-02-2011 by John Hibbert | 0 comments
In recent years market prices have taken on far greater prominence in insurance valuation and capital management as a new paradigm has been adopted by insurance regulators and accountants. This central role of market prices is recognised and, as a result, Solvency II regulators and international accountants (IASB/FASB) have drafted rules and guidance with the aim of defining which prices should…
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A Comment on the Solvency II equity dampener: more change to come?
Posted on 16-02-2011 by John Hibbert | 0 comments
In the Solvency II standard formula for an insurer’s Solvency Capital requirement (SCR), the standard stress adopted for equity risk for the purpose of the 5th Quantitative Impact Study (QIS5) was 39%. This was somewhat less severe than what had previously been proposed by CEIOPS in its level-2 advice where a majority of regulators proposed a standard equity stress of 45%.
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