Legislators in the European Union have come to agreement on reforms to Solvency II, which is hoped to include additional proportionality for EU-domiciled captives, but the final text is yet to be released.
The Solvency II review has rumbled on for more than two years with FERMA, ECIROA and other captive stakeholders lobbying hard for greater proportionality to be applied to low risk undertakings, including captives.
The EU announced on Thursday, 15 December an agreement between member states on various reforms to Solvency II, but only a passing mention was given to proportionality with no further detail as yet.
It is hoped the full text will be published next week, but it could also be delayed until the new year.
“Finally, the review will also make insurance supervision more proportionate and better tailored to the actual risks,” said Markus Ferber MEP, who has led the negotiations in the European Parliament.
“Small insurance companies with a simple and safe business model will benefit from reduced administrative burdens.”
Lobby groups have been ambitious in seeking a greater level of proportionality applied to pure captives, writing only first party risks of the parent group, but it remains to be seen how far the reforms have gone.
As new European captive domiciles emerge, such as France and Italy, and with Spain reportedly exploring a similar initiative, there is hope the wider appeal of captives could have influenced reforms in favour of greater proportionality.