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Insurance Regulation and Governance
Our aim is not only to maintain compliance with regulation across all jurisdictions but also to capitalise on the benefits of sound governance.
The prospective regulatory regime for insurance firms in Europe, Solvency 2, will come into force on 1st January 2016. The Club’s project to achieve full compliance has moved into the final phase, during which the Club will seek approval from the regulator for the treatment of certain elements of the capital calculation.
The key application is for regulatory approval of the Club’s internal model.This sophisticated model has already been successfully employed within the business to help the Board determine the impact of key decisions on future results and capital requirements. It is also integral to the process of assessing the Club’s own reinsurance needs.
With regulatory approval, the Club will be able to use the model to determine the regulatory capital requirements under Solvency 2. As the model is specifically tailored to the UK Club, it provides a more accurate and comprehensive view of the Club’s risks,which in turn will enable the Club to hold less capital than if the more general, standard factors were to be applied.
Your Board is working closely with the regulator to gain approval for the model and has been encouraged by feedback received during this process to date.