However, in Guernsey, we have opted for certainty. The Island is not part
of the EU so we are not required to adopt its Directives and our government and the GFSC have issued a joint statement to say that currently the Island doesn’t have any plans to seek equivalence under Solvency II.
Solvency II has been designed to address systemic and group
risks within commercial insurance markets but these are risks not generally faced by Guernsey-based international insurance companies, where there is a large proportion of captive insurance companies. Therefore, as things stand, equivalence could potentially burden Guernsey insurers with additional costs and render currently effective captive business plans uneconomic.
Bermuda, Japan and Switzerland are adopting a different stance.
These countries were in the first wave of equivalence applications, but were not doing so primarily for their captives, but to protect their international commercial reinsurance industries. Bermuda in particular is seeking to mitigate the effects on its captive insurance business. We continue to monitor these developments closely.
Guernsey will continue to meet the standards of the International
Association of Insurance Supervisors (IAIS)—the IMF has commended the Island for having high levels of compliance with the 28 insurance core principles of the IAIS—but its proportionality principles mean that we will provide a more attractive environment for captive owners and other niche insurers.
New insurance business
Martin Le Pelley, chairman of the Guernsey International Insurance Association (GIIA), believes that Guernsey’s decision currently not to seek equivalence under Solvency II has “no doubt” contributed to the surge in new insurance business during 2011.
Latest figures show that the GFSC licensed 72 international insurers during 2011, which is a 53 percent increase from the 47 approved during 2010. The growth is across the range of entities from conventional captive insurance companies to PCCs, ICCs and, in particular, PCC and ICC cells.
Towards the end of 2011 there was notable media interest in two new schemes with links to Guernsey. Broking firm Acumus launched
56 emea captive 2012
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