The European risk association continues to insist that captives must be treated differently under the solvency regime
Ferma attended the European Parliament’s Economic and Monetary Affairs Committee (ECON) meeting as MEP Markus Ferber presented its draft report on Solvency II.
In a tweet, it said that Ferma “welcomes both this report and the discussions which followed, since they highlighted the need for a proportionate approach” and emphased it has always insisted on proportionality” as regards to the treatment of captive insurers under the solvency regime.
In its position paper earlier this year, Ferma called for risk-proportionate regulation of captives in European insurance regulation and welcomed the creation of a new classification of “low-risk profile undertakings”.
This amendment would further reduce complexity for small and less risky insurers, specifically captives, which is one of the five main problems that the Commission addresses in its review of the rules, stated Ferma.
FERMA reiterates to the Commission that the solvency of a captive rarely has any impact in the insurance market, but that they are a valuable part of the risk management strategy of many companies.
“They provide European enterprises with an alternative form of risk transfer, which is crucial in the current hard insurance market conditions,” it said.
“We are of the firm belief that more should be done to make Solvency II truly risk-based and proportionate. We say this as insurance buyers but also as users of captives during hard market conditions, and also amid growing questions over the ‘insurability’ of certain risks, such as those linked to climate change.
”Options for risk transfer are, therefore, more important than ever. FERMA looks forward to contributing our unique expertise to the political discussions on Solvency II.”
Blog: FERMA 2022 Daily News Summary sponsored by AXA XL
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Ferma welcomes Solvency II proportionality recommendations