Own funds rule will reduce reported solvency ratios, say insurers

Industry says European Commission proposal will have negative side effects

european-commission2-0909

Insurers are challenging the European Commission about an amendment to rules that restrict the use of capital under Solvency II, amid fears that the changes will cause solvency ratios to worsen, making firms appear financially weaker to shareholders and creditors. The change in the wording of the delegated acts (the second stage of the Solvency II legislative process) is intended to prevent levels of insurers' eligible capital from falling in stressed conditions. Eligible capital is the share

To continue reading...