AIRMIC has urged its members to contribute to two inquiries that will have a material affect on the future conduct of insurance
One is the revision of UK insurance contract law by the Law Commission and Scottish Law Commission. The other is the work on the practical implications of Solvency II.
The law commissioner heading the inquiry into insurance contract law is a former member of AIRMIC, David Hertzell, and he has asked AIRMIC to take part in the work to ensure that the views of commercial insurance buyers are represented in the commissions’ recommendations.
AIRMIC has welcomed reforms that would improve the balance of rights between insurer and insured. Technical director Paul Hopkin commented, ‘The Marine Insurance Act of 1906 still regulates the conduct of insurance business in the United Kingdom. It reflects the sentiments of the late 19th century, which are no longer appropriate.’
The second inquiry now underway deals with the practical implementation of the European Solvency II framework directive. It is the work of a group of insurance regulators, the Committee of European Insurance and Occupational Pensions Supervisors (Ceiops). Ceiops will use the results of its latest survey, known as QIS4, as the basis of advice to the European Commission.
The most immediate concern for risk managers is the way Solvency II could affect captive insurance companies. Many of those domiciled with the European Union would find it onerous to meet the requirements of the directive, while the possible impact on commercial insurers fronting programmes for non-EU domiciled captives would add an extra dimension of cost and complication.
As a result, AIRMIC has encouraged its members and their captive managers to give any comments they may have to Ceiops and the Financial Services Authority (FSA).