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“ I think that simplifi cation ultimately in any of the regulations is going to be the most benefi cial thing, with clarity being a part of that, but how we get there is another question.”


Scott Schenker LECG


ultimately in any of the regulations is going to be the most benefi cial thing, with clarity being a part of that, but how we get there is another question.


COMITER: I think it’s also about the regulators being intelligent about how they enforce compliance and avoid a situation where they say compliance looks like ‘x’ and where they give companies a tick box that requires them to document their corporate procedures and internal model. The regulators should have some trust in the businesses. As companies are going through Solvency II or other regulation that is designed to improve their business, the regulators may have to change and explain what ‘good’ looks like. It’s a constantly moving target, and as soon as you get to a situation where companies are in compliance with Solvency II, the defi nition of ‘good’ is going to jump up, and by the time the US changes its solvency regulation, it’s going to be a different ball game.


SPILLER: Regulation is always a leap-frog event, isn’t it. Richard Spiller Edwards, Angell, Palmer and Dodge Law


COMITER: You’re going to go from 80 percent compliance to probably 110 percent. ANDRE: This is where we see regulators and ratings agencies frankly


the NAIC, to be assessed for equivalence. That shows great potential also for an interim path towards a mutual recognition standard, perhaps, and this may prevail over the long run or the IAIS common framework may prevail. They’re not mutually exclusive because they can apply to different classes of business. The IAIS so far is just looking at internationally active insurance groups for mutual recognition framework to be applied more broadly. So harmonisation of regulatory standards is good, probably, and if those standards are implemented in a way that provides effi ciency for the insurers and avoids duplication, redundancy or contradiction, then that’s a good thing. The regulators are open to having a system that’s effi ciently and intelligently designed, but that’s a complicated thing to do. It means that some jurisdictions have to compromise or pull back and not achieve their fi rst-stated objectives.


SPILLER: It’s cumbersome for the carriers to handle, and even with


some of the jurisdictional issues, there are retaliatory acts and situations between the states become extremely complex. I think that simplifi cation


I’m sure we all look forward to not only seeing how US regulation develops, but also contributing to that debate. Thank you all for taking part.


November 2010 | INTELLIGENT INSURER | 29


appearing as competitors sometimes. We should be co-ordinating our information requests better, looking in a co-ordinated way at the capital models and group supervision. There is information that agencies have been gathering for years, and perhaps if regulators and ratings agencies narrow our requests and become less of a burden to the industry, then it will be more effective overall. Agencies and regulators can certainly co-exist. Certainly, looking at the United States, we are pleased to see the Solvency Modernisation Initiative and certain other measures. There is a general forward motion, and in the context of the issues we’ve spoken about today, the NAIC has stepped up to meet the challenges, but it does take a while.


SPILLER: I think that maybe some people will make the mistake of looking at Dodd-Frank as the end of the road. In fact, it is the beginning of the road. There is a potential opportunity there for signifi cant changes to the way in which insurance is regulated in the US, but it is just the beginning.


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