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Daily Insurance Industry News
Friday 25th of May 2018
January 25, 2008

Solvency II Directive Being Ignored, Says Deloitte

by Stewart Douglas

Story link: Solvency II Directive Being Ignored, Says Deloitte

The majority of UK insurers feel the introduction of the Solvency II capital adequacy directive will have a burdenous impact on their business, with even more less than adequately prepared to handle the implications of the European legal instrument when it comes in to force, according to a report released today by accountants and business analysts Deloitte.

Designed to relate specifically to insurers throughout European Union member states, the directive will be transposed into national law and may give rise to liability to those falling outwith its provisions when they are ratified and translated into the domestic statute book.

Relating to capital maintenance provisions for insurers, the directive is going to have a significant impact on insurance companies throughout the EU and further afield, despite the fact that as many as 7 in 10 firms have yet to give significant thought to developing the necessary resources.

Around 69% of insurers are said to feel that the new directive is yet more red-tape to obstruct their business, whilst almost half of those surveyed said that the new directive will be far more costly than intended, making it less of a valuable instrument all round.

“The majority of insurers currently view the implementation of Solvency II as purely a regulatory burden, rather than as a tool that can help their business to achieve its strategic goals,” said Rick Lester, speaking on behalf of the Deloitte report today.

Additionally, the report suggested that a number of insurers may be reluctant to fully comply with the terms of the directive, given that 30% in the Deloitte survey have as of yet to conduct full analysis on the implications the directive could have on their business.

 

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