Revision of Solva 2: prisoners exempt from certain requirements

THE European Parliament has just officially approved the amending text Solvency Directive 2. This reduces regulatory requirements for businesses captives insurance or collateral.

Proportionality measure

The first notable point, these vehicles can be classified into “small and uncomplicated businesses” category. This classification gives them an advantage measure of proportionality. “Given that captives represent a special risk profile, this new text reduces certain requirements that apply to them, especially in terms of internal risk assessment, solvency? and disclosure of information. Can they also be classified as small and non-complex companies and thus benefit from the associated proportionality measures, particularly in terms of disclosure, governance, review of written policies, calculation of techniques, internal risk assessment and liquidity risk management plans?exactly Thomas Chaboureaulawyer of the Paris staff. These reductions, which are welcome, will certainly support the development of captives within the EU by drastically reducing the administrative burden that currently burdens them., notes.

Abolition of the audit obligation

Small, uncomplicated businesses don’t need it “has no impact on the financial stability of the Union”the latter, according to Parliament, exempts these companies from the obligation to carry out an audit solvency and financial situation report: “Due to the special risk profile and specificity of captive insurance companies or reinsurance companies, they should not be subject to an audit obligation”. This obligation, which applies to insurance companies, serves to assess the degree of exposure of companies to the risks associated with climate change.

Limited disclosure of information in the event of an inspection

In order to take into account market developments and finalize some technical aspects, the Parliament states that the European Commission will have the power to adopt delegated acts, in particular as regards the criteria for limited transfer of information for the purpose of management applies to captive insurance companies or reinsurance companies.

“The text reinforces the principle of proportionality and reduces the complexity of the prudential framework for captives who represent lower risk profiles if they only cover the risks associated with the industrial or business group to which they belong.continues Thomas Chaboureau. The aim of the revision of the directive is, in particular, to ensure consistency in the distinction between small and large organisations..

Next step: the text must go before Council of the EU. If it also accepts this text, the directive will then be published in Official Journal of the European Union. An effective date has not been set at this time, but it should happen 2026 or 2027 horizon at the latest.

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