23 July 2010
Published in: Regulation - supervision
European actuaries praise QIS5
The final QIS5 specifications should be welcomed by the industry, Seamus Creedon, speaking on behalf of the Groupe Consultatif, said today.
Creedon, Solvency II project manager for the Groupe which represents European actuaries, said its main concern was that requirements for technical provisions and capital should take into account real economic risk. "The draft is broadly right in this respect," he said.
The insurance sector has been lobbying governments and regulators not to treat insurance companies like banks as post-crisis regulation is drawn up. The industry has expressed mixed sentiments about how far its arguments are being listened to [IERM, Regulation/supervision, 12 July 2010, "Nervous regulators won't allow any risk"]; however, the Groupe believes QIS5 is a positive step in this battle.
"We also believe the final specification appropriately takes into account the important differences between insurance and banking," Creedon commented. "Insurance is about paying valid claims in specific circumstances, and is not like repayment of a deposit.
"Life assurance and annuity policyholders want their policies honoured in full rather than their money back, and we welcome the manner in which this specification takes this character of insurance liabilities into account."
Creedon said the Groupe sees no evidence of any significant need for substantial amounts of additional capital for the industry. "We are very aware that the returns required by providers of additional capital would mean higher prices to customers," he added.