Marsh: Solvency II changes can benefit captives
A number of forthcoming amendments to the Solvency II Directive could offer significant advantages to captive owners, according to a new analysis article by Marsh.
With new classification criteria for small and non-complex (S&NC) undertakings, eligible entities can benefit from reduced administrative burdens and costs. According to Marsh now is the opportune time for companies to explore how these changes can unlock new opportunities for business.
The Solvency II Directive, which establishes regulatory requirements for (re)insurance companies within the European Union, has been undergoing a thorough review process over the past several years. A consensus has now been reached on the proposed amendments to this Directive. Marsh has publicly and vocally supported this review process, and is enthusiastic about the forthcoming implementation of these changes, which are set to significantly benefit captive owners.
Marsh points to changes to the criteria whereby insurance companies, including captives, can be classified as a S&NC undertaking and can therefore benefit from certain proportionality measures.
Marsh said that captive owners will benefit from the following new key proportionality measures for S&NC, in terms of time and cost savings from reduced administrative burden:
• The own risk and solvency assessment review will occur biennially, with simplifications to the review process, such as the removal of macroprudential analysis and climate change scenarios
• A balance sheet audit is not required
• Review of written policies (for example, underwriting policy) required every three years
• For the solvency and financial condition report (SFCR), only quantitative data is required annually, with a full report submitted every three years
The regular supervisory report (RSR) is required every five years, with simplifications applied to the solvency capital requirements calculation
For more information contact Marsh.
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