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The new methodology is necessary to bridge the now longer gap until the EU's Solvency II regime is implemented, the regulator said. From the beginning of 2014, the Danish insurance and pensions sector will be required to adhere to new capital requirements based on an adjusted QIS5, the quantitative impact study for testing Solvency II capital requirements, the regulator said, adding that the adjustments were in line with the latest developments.
The aim of this is to promote an equal level of policyholder protection by closing existing regulatory gaps in relation to the individual solvency requirement. As things stand, the individual solvency need is an insurer's own assessment of its capital base, and the statement it makes depends on its risk profile.
Another reason for devising the new regime is to ensure Danish compliance with international supervisory standards from the International Association of Insurance Supervisors (IAIS) and interim measures from the European Insurance and Occupational Pensions Authority (EIOPA).
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