Ceiops says evolving Solvency II rules won’t hurt insurers
Carlos Montalvo, secretary general of the European insurance regulators group Ceiops, says most insurers would not need to raise additional capital under revised Solvency II rules, Bloomberg reports.
“Most insurers in Europe will be able to meet the stricter capital requirements tested under the fifth impact study (QIS5). Recently expressed concern about overly high capital requirements under current proposals is definitely not fully consistent with our calculations,” he said.
“There are lessons that we learned from the financial crisis and we have to make sure that Solvency II not only works in years like 2006 but that it also works in years such as 2008,” Montalvo said.
Not an insurance crisis
“The overall impact of our final proposals is definitely not material if you take into account the capital relief from lower technical provision requirements,” Montalvo said.
Under Ceiops’s final advise, technical provisions, or funds insurers must set aside to cover future liabilities, will be lower “because we are getting rid of the implicit prudence” included in current regulation, he said.
“Insurers are definitely right when they say the financial crisis was not an insurance crisis,” he said. “Let’s test in QIS5 if the current proposals work; there is sufficient time for changing assumptions and calibrations if they don’t work.”
