Guernsey To Capitalize On Solvency II Decision

by Jason Gorringe, Tax-News.com. London

18 May 2011

Following Guernsey's decision not to seek equivalence under Solvency II, the jurisdiction plans to hold an event to showcase the decision's potential benefits for the island as a captive insurance domicile.

Guernsey is the largest captive insurance domicile in Europe but it is not part of the European Union and therefore the island’s authorities had to decide whether to seek equivalence under the EU’s proposed insurance and reinsurance regulatory regime, Solvency II.

The Guernsey government and regulator issued a statement in January confirming that the island has no plans currently to seek equivalence under Solvency II but it will continue to follow the standards of the International Association of Insurance Supervisors (IAIS). Now the island is hosting an event to explore the rationale behind the decision and its implications, including the potential benefits it can offer as a captive insurance domicile.

Peter Niven, the Chief Executive of Guernsey Finance, the promotional agency for the Island’s finance industry, said: “The decision not to seek equivalence under Solvency II is based on the fact that under the current proposals, we would need to adopt measures that might undermine the competitive nature of our captive insurance industry".

The rationale behind the government's decision and opportunities for the island's captive insurance industry is to be discussed in depth at an event being held at the London Stock Exchange on June 14 where guest speakers will include Salil Bhalla, the Vice President and Portfolio Manager at Chartis; Nick Wild, Managing Director of JLT Insurance Management in Guernsey; Jonathon Groves, Captive Consulting Leader at Marsh; and Ian Morris, Partner and Head of Insurance at BWCI in Guernsey.

Niven added: “This event aims to provide clients and their advisers with more information about why we have chosen this route and what it means for them. I believe that this is an extremely good opportunity for us to explore the key issues and in particular the potential benefits that Guernsey will be able to offer as a captive insurance domicile outside the scope of the Solvency II regime.”

“The decision not to seek equivalence with Solvency II was a significant development for our insurance sector. It was not taken lightly and indeed we will continue to monitor how the process unfolds during the coming months to make sure that our captive insurance industry is best placed for the future. This event is very much part of our two-way communication with key decision makers in the captive insurance community," Niven concluded.

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