This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
  • Delicious




Ernst And Young Comments On New Solvency Rules

by Glen Shapiro, LawAndTax-News.com, New York

26 June 2008

With the National Association of Insurance Commissioners’ (NAIC) latest move to assess international solvency regulations and make adaptations to the US regulatory structure, Ernst & Young announced recently that it has seen increased momentum for global alignment with solvency rules, and endorses the Solvency Modernization Work Plan, which NAIC adopted this month.

"We applaud the work of the NAIC on this initiative,” commented Philipp Keller, Head of the Ernst & Young Global Solvency II Task Force, adding that:

“NAIC’s goal to upgrade the current framework is entirely in line with the organization’s historical commitment to be at the forefront of regulation and supervision.”

The NAIC plan will compare the US risk-based solvency system with Europe’s proposed solvency directives, known as Solvency II, and will analyze the effect that Solvency II might have on US insurers, particularly with regard to capital requirements, accounting standards, group supervision, valuation issues, and reinsurance.

The overhaul of Europe’s solvency framework is scheduled for implementation across the continent beginning in 2012.

“Introduced in the early 1990s, the US risk-based framework was state of the art,” Keller continued, going on to state that:

“Modernizing US regulations should lead to a more level playing field between US and European insurers and to a convergence of regulatory requirements. This may also reduce opportunities for regulatory arbitrage and create a more transparent and competitive financial market.”

The adaptation of the US insurance solvency system should benefit both the world’s largest insurance market and the global industry.

“An economic- and risk-based regulatory framework in the US might well create efficiency gains not only for US insurers, but also for the many foreign insurance groups that have business in the US,” concluded Matthew Clark, a member of the Ernst & Young Global Solvency II Task Force.

.

 

 






Write a comment