On 8 April Hector Sants, Chief Executive of the FSA, addressed the FSA’s annual Insurance Sector Conference on the subject of international developments in insurance regulation.He outlined the key issues arising from the Solvency II Directive and described how the FSA was involved with the European Committee of Insurance Supervisors in developing advice for the European Commission on some aspects of the Directive. He urged all firms to participate in the Committee’s quantitative impact study on its proposals. He expected that political agreement on the high level framework Directive would be reached by the end of the year.

He said that the International Association of Insurance Supervisors was making good progress in developing international solvency standards, and that many of the principles published within their guidance papers were consistent with the direction that the UK and Europe aim to travel.

Addressing the competitiveness of the UK, he said that the FSA was trying to encourage reform of the current US business insurance system, whereby so-called alien reinsurers are required to post one hundred percent collateral to cover their liabilities to US cedents. He also mentioned the recent European inquiry into business insurance, which has raised issues around the competitiveness of practices in the London Market. The European Commission had expressed concerns about the manner in which the final price of a risk is agreed during negotiations in the subscription market. They had also stated that they were not minded to renew the insurance block exemption, which provides the industry with an exemption from competition scrutiny over industry cooperation on areas such as common policy wordings.

http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2008/0408_hs.shtml

Click below for the recent blog on the European Commission’s inquiry into the business insurance market.

https://www.insurereinsure.com/BlogHome.aspx?entry=421