Non-EU Insurance Domiciles Now Face Solvency II Rules
by Jason Gorringe, Lowtax.net, London
05 January, 2016
The Solvency II Directive came into effect on January 1, 2016, introducing a new supervisory framework to harmonize insurance and reinsurance regulations and establish a single market for the insurance sector in the European Union.
Anticipating the impact of the regime, Bermuda, the largest offshore insurance market, sought to ensure that it achieved equivalence in time for the introduction of the new regime.
"Equivalence" enables EU insurers to use local rules to report on their operations in third countries, while third country insurers are able to operate in the EU without complying with all of the EU rules. Both Bermuda and Switzerland have achieved full equivalence with the regulatory standards.
Provisional equivalence has also been granted to Australia, Brazil, Canada, Japan, Mexico, and the United States. Provisional equivalence is granted to non-EU jurisdictions that may not meet all the criteria for full equivalence. Instead it is in recognition that an equivalent solvency regime is expected to be adopted in that territory in the foreseeable future.
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