Guernsey Not Adopting Solvency II Framework

by Jason Gorringe, Tax-News.com, London

26 January 2011

Guernsey authorities have announced that there are no plans for the island to seek equivalence under the European Union (EU’s) proposed Solvency II framework.

The Commerce and Employment Department of the States of Guernsey, and the financial regulator, the Guernsey Financial Services Commission (GFSC) have released a joint statement outlining their current position regarding the regulation of the island’s insurance sector, in particular in relation to the EU’s proposed Solvency II framework.

Their joint statement reads:

“Guernsey remains committed to meeting internationally-accepted regulatory standards as set by the IAIS and endorsed by the G20. In 2011, the IAIS standards will be changing to take account of latest developments on risk-based solvency.“

“The States of Guernsey and the GFSC will be focused on amending Guernsey’s regulatory regime to take account of these international developments. Obviously any changes to that regime will need to take account of the nature of, and be appropriate to, Guernsey’s insurance industry.”

“Work on implementing those emerging global standards in Guernsey’s regulatory regime will continue in 2011 and will involve full consultation with Guernsey’s insurance industry.“

The statement adds:

“Parallel to this work the Commerce and Employment Department and the GFSC will continue to monitor developments on Solvency II with a view to determining whether or not full or partial equivalence may be beneficial to Guernsey.”

“Before any decision is made as to whether Guernsey should seek equivalence in the future the Department and the GFSC will consult with Guernsey’s insurance industry to ensure that the implications of seeking equivalence are fully understood."

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