Solvency II is a European Commission-driven directive and is a fundamental review of the capital adequacy regime for the European insurance industry. It aims to establish a revised set of EU-wide capital requirements and risk management standards to replace current solvency requirements.
However, there has been some concern voiced by those within the insurance industry that the requirements will be too difficult for some to match and that the industry is ill-prepared for the new regime which is due to be implemented in January 2013.
In view of these concerns, the Jersey Financial Services Commission has decided that it will not be implementing a Solvency II equivalent within the jurisdiction.
Richard Packman, chairman of the Jersey Insurance Industry Association, said: “It is important that Jersey, while retaining its own high standards of regulation, offers an environment that is attractive to captive owners and specialist insurers and this move by the commission would support that objective. This decision also demonstrates the value of the close consultation between the industry, regulator and Government officials.”
The JFSC also confirmed that it intends to focus on changes to the international standards set by the International Association of Insurance Supervisors, due to be adopted later this year and respond accordingly.
In late January, Guernsey made a similar announcement and said, rather than adopting a Solvency II equivalent, it would continue to match the standards set by the International Association of Insurance Supervisors.
