Solvency abuse


As the debate rages in the banking industry over the Basel II capital adequacy rules, blamed by some for exacerbating the financial crisis, the insurance sector prepares to introduce its own risk-based capital framework, Solvency II. But the change, due to come into force at the end of 2012, will cause problems for many firms, believes Giovanni Cucinotta, head of research at Italian insurance regulator Istituto per la Vigilanza sulle Assicurazioni Private e di Interesse Collettivo (Isvap).