Guernsey decides against Solvency II equivalence

Guernsey has no plans to seek equivalence under the European Commission’s Solvency II capital regime.

But, according to a joint statement from the Guernsey Financial Services Commission (GFSC) and the States of Guernsey Commerce and Employment Department, the two bodies will continue to monitor Solvency II developments with a view to determining whether full or partial equivalence would be beneficial to the Channel Islands territory.

Before any decision is made about seeking equivalence in future, the commerce and employment department and the GFSC said they would consult Guernsey’s insurance industry to ensure the implications are fully understood.

Companies domiciled in a country deemed to have Solvency II equivalence will not need to put up additional capital to assume risks from EU entities or be subject to EU regulation for their European subsidiaries.

Equally, EU companies using insurers or reinsurers in a Solvency II equivalent territory will not face additional capital penalties.