On 8 December 2011, Julian Adams, Director of Insurance at the Financial Services Authority (FSA), explained in a speech to the Association of British Insurers how UK (re)insurance companies may be permitted to start their Solvency II implementation as initially scheduled on 1 January 2013 rather than on the delayed implementation date of 1 January 2014.

The FSA has previously made clear that its current rules, the Individual Capital Adequacy Standards (ICAS), will remain in force for all firms until the Solvency II regime comes into force. However, Mr Adams explained that firms are invited to consider how they think their work on the Solvency II model could be used to meet those current rules, thereby removing the need to run two different models in parallel. The emphasis will be on firms to satisfy themselves that their Solvency II model, alongside their wider system of risk management and governance, meets the existing ICAS rules. The intention behind this approach is to avoid the need for firms to apply for complicated waivers or seek specific permission from the FSA to make the transition early.

Welcoming the news, Lloyd’s general counsel, Sean McGovern, said that Lloyd’s expected that all managing agents will use their Solvency II models instead of Lloyd’s ICA (Individual Capital Assessments) in 2013.

Click here to read the full text of the speech by Mr Adams.