The insurance regimes in Japan and Switzerland meet the criteria for equivalence with the Solvency II regime but Bermuda has more work to do, the sector’s Euro-regulator has ruled.
The conclusions are outlined in a new consultation paper issued by the European Insurance and Occupational Pensions Authority (Eiopa).
Companies domiciled in a country deemed to have Solvency II equivalence will not need to put up additional capital to assume risks from EU entities or be subject to EU regulation for their European subsidiaries.
Equally, EU companies using insurers or reinsurers in a Solvency II equivalent territory will not face additional capital penalties.
The consultation paper says that the Japanese and Swiss regulatory regime meet the criteria with some caveats.
But Eiopa concludes that Bermuda only partly meets the criteria. It says that the Bermuda Monetary Authority (BMA) is not equivalent with regards to its requirements around changes in business, management and qualifying holdings.
Only critical changes to business, such as engaging in non-insurance business, require the BMA’s approval, according to the paper. To be Solvency II-equivalent, the paper says that the authority would need to develop legally binding criteria surrounding changes to business.
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