Solvency II is a European wide regulation, which specifies the levels of capital that insurance companies must hold. It will encourage good risk management, and further increase transparency and disclosure. Solvency II is designed to increase confidence for customers when buying insurance.
The regime will ensure a high level of protection for customers, for both general and long term insurance and savings products, regardless of the company they buy their insurance from.
Solvency II by numbers:
-
Solvency II has been over 10 years in the making.
-
More than 400 UK firms are expected to be within scope.
-
ABI members invested over £3bn into transitioning to Solvency II.
-
Over 3,200 pages of Solvency II regulatory text published, which firms must comply with, by the European Commission and the European regulator, EIOPA.
-
Under Solvency II, firms will have to hold enough capital to survive a 1 in 200 year stress on their balance sheet.
-
19 UK firms received approval from the Bank of England to use their own Internal Model to calculate their capital requirements, three times more than any other EU state. More UK firms will be using Internal Models as part of insurance groups based elsewhere in the EU.
Customers will not notice any difference with their existing insurance or when buying new products. The UK industry currently holds high levels of capital, and this will continue under the new regime.
The Solvency II regime has been a major programme for the UK insurance industry, and insurers and long term savings providers are on track to ensure its smooth and successful implementation from January. The ABI has worked closely with policymakers and regulators at the national and European level to ensure the regime works well for the UK market, in particular for annuity products.
ABI Director General Huw Evans said: “The UK industry has supported the objectives of Solvency II since the beginning and invested significant time and resources to ensure it works as intended for the market. With firms now having confirmation about their Internal Models, the industry is well prepared to transition to Solvency II in January.”
“The UK industry has high levels of capitals already, so policyholders can be reassured that they will not notice a difference in the transition. The new regime will ensure customers can continue to have confidence in the products they buy, and know their claim or annuity will be paid.
“As we move to Solvency II, time should now be given for this change to settle in before any further reform. To ensure Solvency II creates a level playing field, and the competitiveness of the UK industry continues, a convergent and consistent approach to these rules is needed across Europe.”
|
