Equivalence Decision In The New Year
The European Commission is drawing up a final list of countries that may qualify for equivalence with Solvency II and will decide on the equivalence of the regulatory regimes of Bermuda, Switzerland and Japan during the first half of 2012.
Jonathan Faull, director-general, internal market and services at the Commission, said 16 countries had been identified that could meet equivalence requirements in the future and that might take part in a transitional regime for Solvency II equivalence.
The Commission is currently considering whether Bermuda, Japan and Switzerland meet the equivalence requirements.
According to a report on the Risk.net insurance news website, the new countries were not identified although they will likely include the US. ”This list takes into account the relevance of the third countries’ insurance sector to the EU insurance sector and vice-versa, and the extent to which third countries have expressed an intention to move towards a risk-based solvency regime,” Mr. Faull said in a letter to Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority [EIOPA].
A final list of countries will be provided to EIOPA by the end of January 2012. The Commission will rule on whether to include these countries within the transitional regime in mid-2013, following a preliminary assessment by Eiopa, said Mr. Faull.
Risk.net said the Commission will decide whether Bermuda, Switzerland and Japan are equivalent once Solvency II’s Level 2 implementing measures have been agreed and EIOPA had updated its reports on the three countries’ regimes.
The criteria for equivalence might be changed once the Level 2 implementing measures are adopted in 2012, Mr. Faull said. “Once this review is complete, the Commission will take its decisions on the equivalence of those third countries. Based on the current timetable, this is likely to be during the first half of 2013,” Mr. Faull added.
In October, EIOPA said Bermuda was only partly equivalent with Solvency II and that Japan and Switzerland met the equivalence criteria but “with caveats”.
Bermuda Monetary Authority CEO Jeremy Cox [pictured] has said the island is cautiously optimistic about being granted equivalence for its regulatory regime.
“We feel quite good about the [EIOPA] report as it stands today,” Mr. Cox said in October. “Effectively, what they said is Bermuda, for its commercial insurance sector, is equivalent, with some caveats.
“We have reviewed those caveats and I don’t think there are many things there that we would feel uncomfortable further evolving our position on,” Mr. Cox added. “We should be in a very good position for a formal decision on equivalency by the end of next year.”
