Despite unclear rules and conflicting approaches from national supervisors, insurers have started submitting their Solvency II internal models for approval. Christopher Cundy and Hugo Coelho assess the state of play
The attempt to create global convergence on insurance supervision is proving to be a bumpy ride. Christina Urias, the NAIC's director for international regulatory affairs, explains to Hugo Coelho how the states view the reinsurance collateral agreement with the EU and the global capital standard.
A request by the UK regulator for internal firms to hold capital against the basis risk in their government bond portfolios will increase incentives for the insurers to move away from long-dated government bonds into swaps. Hugo Coelho reports
The use of undertaking specific parameters can significantly reduce Solvency II capital requirements, so long as insurers can produce high quality data, say Dale Lee and Claire Briggs
Reinsurance or sub debt alone is unlikely to provide the best solution to meeting solvency capital requirements; instead, a blended approach should be considered, say Matthew Day and Ross Milburn
There are other advantages, too, over equity and hybrid capital, which are more complex to issue, as Peter Bärnreuther and Norbert Kuschel describe
The contents of actuarial appraisal valuations in M&A situations are set to evolve with the arrival of Solvency II and updated accounting standards. Fergal O'Shea discusses the likely changes and considers how the appraisal reports will remain relevant.
The Dutch regulator is poised to publish guidance for insurers on use of the matching adjustment. Repackaging of mortgage loans is one bone of contention, another is the treatment of pension contracts. Hugo Coelho reports
Austrian insurer Uniqa has replaced its traditional guaranteed product with a 'new traditional' product that comes with a 0% guarantee and bonus at maturity. It is just the latest insurer to adjust its product portfolio in response to the twin threats of low rates and Solvency II. Hugo Coelho reports
The response of US state insurance regulators to the IAIS consultation on the insurance capital standard sheds light over hurdles on the way of a global compromise. Hugo Coelho reports