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Solvency II could erode management control
administrative challenges, the looming Solvency II regime could also have a serious affect on the decision-making process of management boards. This means it could have a greater influence on the ways companies are run than initially intended. This is the view of Dr Arno Junke, chief executive of Deutsche Rück, who believes not all aspects of the new regime have been discussed thoroughly enough. “Once Solvency II has been transformed into
A
national legislation, which is not too far away, the whole modelling issue will be passed into national Rules of Law of some sort, irrespective of wheth- er you use the standard model approach a partial model or individual modelling,” he says. “When this happens, management will, to a
s well as providing insurers and reinsurers with a number of organisational and
certain extent, be confined to react and respond based on the calculations and outcomes of the models. Questions need to asked about how that will affect the decision capability and decision- making process of a management board.” He believes some boards of management
could find these conditions restricting. They must also clearly understand the implications of not fol- lowing the guidance provided by the models. “The risk is that should something go wrong
when they don’t follow the path dictated by the model, they then might be held liable as the direc- tors and officers of that business. They could be held liable for not reacting in accordance with the model. That does not seem right. It could be a serious consequence of imposing this regulation.” Junke also believes this more restrictive envi- ronment prescribed under Solvency II could in-
Award winners – in the 2011 Intelligent Insurer European Awards
insurance brokers & consultants
The 2011 Intelligent Insurer Awards polled the market to discover and reward excellence in a variety of categories and business lines. Some of the winners collected their trophies here in Baden-Baden. For a full list of the rest see the October issue of Intelligent Insurer.
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Martin Bisping, head of non-life risk transformation at Swiss Re, collects the award for Best European ILS advisor on behalf of the ILS team at Swiss Re yesterday in Baden-Baden.
Jan-Oliver Thofern, chief executive of Aon Benfield Deutschland, collects three awards: for Best European Property Reinsurance Broker, Best European Casualty Reinsurance Broker and European Reinsurance Broker of the Year.
www.intelligentinsurer.com www.scr-broker.com Dr Arno Junke, Deutsche Rück
hibit the best people from working in the industry. “Regulation, in the form it is being discussed now, could erode the quality of management talent over time,” he says. “With all of these restrictions coming through
regulation it might be harder to attract young tal- ented people if they face a very hard and restric- tive path in their career,” he says. Junke is also uncomfortable with how the
steady increase of regulations will shift the bal- ance of liability issues even further from the prin- cipal, or owner of the business, to their agent, who runs the business. “I don’t know if that is a sound way to do it,” he says.
26.10.11 WEDNESDAY
In sure world...
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