What is Solvency II equivalence?

What is Solvency II equivalence?

Solvency II equivalence for third countries means a non-EU jurisdiction has an insurance regulatory regime that achieves the same outcomes as those determined under the Solvency II framework. Solvency II empowers the EC to. equivalence decision of a third country’s solvency and prudential regime.

Is the US Solvency II equivalent?

The Commission has also decided that Australia, Bermuda, Brazil, Canada, Mexico and the USA are Solvency II equivalent, for group capital purposes (only); on a 10 year renewable basis (only) and, in the case of Bermuda, only in respect of commercial insurers, not captives. This is a little surprising.

Is Japanese Solvency II equivalent?

2. In November 2015, the European Commission published its decision to grant temporary equivalence to Japan in accordance with Article 172 of the Solvency II Directive and based on the advice of EIOPA. The European Commission, EIOPA and the FSA welcome the regulatory and supervisory developments by both sides.

Does Bermuda have Solvency II equivalence?

Bermuda has been granted equivalent status under the Solvency II directive, besides being approved as a qualified jurisdiction by the US National Association of Insurance commissioners.In the current socio-economic climate, one could be forgiven for thinking that international businesses use offshore jurisdictions to …

Does the UK have Solvency II equivalence?

The Solvency II directive extends equivalence in three areas: reinsurance, solvency calculation and group supervision. Switzerland and Bermuda have full Solvency II equivalence in all three areas. The U.K. declared the EU equivalent for Solvency II purposes on Nov. 9, 2020.

Is Switzerland subject to Solvency II?

Following advice received from the European Insurance and Occupational Pensions Authority (EIOPA), the European Commission has determined that Switzerland’s regime is fully equivalent to Solvency II.

When did Solvency II go live?

1 January 2016
Primarily this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency. Following an EU Parliament vote on the Omnibus II Directive on 11 March 2014, Solvency II came into effect on 1 January 2016.

What is solvency of a company?

Solvency is the ability of a company to meet its long-term debts and other financial obligations. Solvency is one measure of a company’s financial health, since it demonstrates a company’s ability to manage operations into the foreseeable future. Investors can use ratios to analyze a company’s solvency.

What is a UK Solvency II Firm?

UK SOLVENCY II FIRM 2.1. A UK Solvency II firm means a firm: (1) that satisfies the conditions set out in 2.2, or. (2) whose Part 4A permission includes a requirement that it comply with the Solvency II Firms Sector of the PRA Rulebook.

Who is subject to Solvency II?

Solvency II will apply to most insurers and reinsurers with their head office in the European Union (EU), including mutuals, and companies in run-off unless their annual premium income is less than €5 million.

What is equivalence assessment under Solvency II?

Under Solvency II, there are three distinct areas for equivalence assessment: Relevant for reinsurers from third countries. If the third country’s rules are deemed equivalent, such reinsurers must be treated by EEA supervisors in the same way as the EEA reinsurers.

What does Solvency II mean for the insurance industry?

The Solvency II Directive recognises that the insurance industry is a global industry. The European Commission may decide about the equivalence of a third country’s solvency and prudential regime towards avoiding unnecessary duplication of regulation.

What is EIOPA and what does it do?

EIOPA assists the European Commission in preparing equivalence decisions pertaining to supervisory regimes in third countries. Positive equivalence findings are mutually beneficial to European Economic Area (EEA) (re)insurers and third country (re)insurers.

How does the European Commission decide about equivalence?

The European Commission may decide about the equivalence of a third country’s solvency and prudential regime towards avoiding unnecessary duplication of regulation. EIOPA assists the European Commission in preparing equivalence decisions pertaining to supervisory regimes in third countries.