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While there is support for the principle of greater alignment between national supervisors, there is greater concern about further additions to the regulatory burden.
"I have some sympathy for what regulators are trying to achieve but I have concerns over possible duplication, particularly in terms of producing balance sheets," said Philip Whittingham, head of Model Validation and Risk Governance, XL Catlin.
Not only do insurers have to complete their Solvency II balance sheets but there is a GAAP balance sheet, two or three rating agency balance sheets and now an IAIS balance sheet.
"That is a lot of information for a board to look at. And then we have the Own Risk and Solvency Assessment (ORSA) that we have to use. While I think the IAIS has learned lessons from past implementations and has engaged well with the industry, my concern is the speed of implementation. It has been less than 70 days since Solvency II came in and we already have something new to implement," said Mr Whittingham.
These concerns are not limited to European insurers but also shared by those in Bermuda that opted to adopt Solvency II for its own market. "In Bermuda we recognised the benefit of being involved in global regulatory standards," said Leila Madeiros, senior vice president, deputy director and corporate secretary for the Association of Bermuda Insurers and Reinsurers.
But there is now trepidation about the regulatory roadmap of the IAIS and its efforts to introduce global regulation. "The timetable does seem a little aggressive," said Ms Madeiros. "Let's hit the pause button and let the equivalence process find its feet. It would be better to learn the lessons from the experience of the first Solvency II reports."
Ms Madeiros also criticised the lack of involvement of insurers in the most recent regulatory developments and specifically the removal of 'observer status' for insurers wanting to participate in the shaping of IAIS regulation. "To be fair the IAIS is trying to find a balance but I think the pendulum has swung from one end to the other - from too much involvement to no involvement whatsoever.”
The point was accepted by Dr Zweimueller, head of Department Regulations at the European Insurance and Occupational Pensions Authority, the body responsible for managing the technical aspects of Solvency II and also a member of the IAIS, who also attempted to allay insurers' fears about aggressive timetables and heavy workloads. "We need input from all sides of the market to make good regulation. Solvency II was revolutionary in creating a risk-based regulatory regime and more public disclosure. But the IAIS framework will take time. For the next five years, our focus will be on supervision. We have looked at the continuous evolution of risk and capital models because regulators need the capacity to understand Solvency II data and risk models so it can look deeper into the business models of insurers."