Originally published in BLG's Reinsurance and International Risk team Notes, Summer 2007
The major developments that have emerged in insurance regulation over recent years are capital adequacy and corporate governance. It is anticipated that Solvency II will incorporate these developments.
In the UK the FSA has attempted to anticipate the implementation of Solvency II by bringing its own risk based regulatory capital regime into force. The FSA introduced Individual Capital Adequacy Standards ("ICAS") two years ago.
It is widely believed that the FSA has been very influential in the development of Solvency II and accordingly many of the measures it contains will reflect FSA thinking. It is therefore worth considering the discussion paper "Supervising Insurance Groups under Solvency II" published by the Treasury and the FSA in November last year. Given the influence that the FSA has had on Solvency II, the Directive is likely to contain provisions similar to those that are proposed
