The Channel Islands Alternative To Solvency II

1 January 2016 will see the EU's Solvency II Directive come into full effect, with requirements for EU insurers to comply with its three pillars on capital and solvency; governance and supervision; and disclosure and transparency of information. Guernsey and Jersey are outside the EU and are therefore not subject to Solvency II. So what are the alternatives that the Channel Islands offer to (re)insurers?

THE GUERNSEY OFFERING

Guernsey took an early stance in 2011 not to seek equivalence under Solvency II. This decisive approach was welcomed by industry against a backdrop of uncertainty created by the delays associated with Solvency II. Guernsey took this decision because Solvency II does not distinguish between different types of insurer and the levels of capital they have to hold, and would therefore place an inappropriately large capital burden on captives, which constitute the major part of Guernsey's insurance industry. It would also be unsuitable for the large