Solvency II - Equivalence Vs Non-equivalence

Originally published in Insurance Insight,25 May 2012

Fiona Le Poidevin, Deputy Chief Executive of Guernsey Finance – the promotional agency for the Island's finance industry, looks at the factors which a third country has to assess when considering whether or not to seek equivalence with Solvency II.

Across the insurance industry there has been one issue in particular which has received more attention than any other in the last couple of years, Solvency II. The EU's proposed regulatory regime for insurance and reinsurance business has been heavily debated and its introduction much anticipated. Jurisdictions which are not part of the EU, such as Guernsey, are not required to adopt the regime and these so-called 'third countries' can choose whether or not to seek equivalence under Solvency II.