15 June 2012

IAIS Cayman Islands conference discussed Solvency II and financial stability

Hosted by the Cayman Islands Monetary Authority (CIMA), senior members from the International Association of Insurance Supervisors (IAIS) and industry participants gathered on 18–21 June for the IAIS Global Seminar and Committee Meetings to discuss and exchange ideas on current international regulatory initiatives affecting the insurance industry, including Solvency II – Europe’s latest insurance regulation that introduces tighter capital and corporate governance requirements for commercial re/insurers.

As the Cayman Islands’ robust and transparent legislative and regulatory platform is already in compliance with international standards, CIMA continues to analyse Solvency II’s potential impact on the captive insurance market before it considers adapting the new equivalency requirements.

Bermuda, which has been pushing ahead to meet the Solvency II requirements, has been told that the Europeans will consider segmented equivalence for Bermuda, which will allow captives to be treated differently, but this exemption has not yet been tested.

Said Clayton Price, Chairman of the Insurance Managers Association of Cayman (IMAC): “IMAC stands firmly behind CIMA’s balanced and pragmatic approach to Solvency II. The Cayman Islands have a completely transparent regulatory model that has withstood the test of time, and is now the second largest captives domicile, holding more than $11.8 billion in premiums.”

He went on to say: “It is the unintended consequences that need to be carefully considered. Unless captives are carved out of this regulation that has been designed for commercial re/insurers, we believe that Solvency II will needlessly drive up capital costs for our North American clients. As a result of CIMA’s considered stance on Solvency II, we are already seeing new captives redomestisticating here.”

Full article

© Business Wire