ICX Helps Identify Legal Uncertainties of Solvency II Directive through Financial Markets Law Committee Pape
09/23/2013Irving, Carlson & Xavier LLP (ICX), a leading counsellor to global financial institutions and corporations, contributed to the Financial Markets Law Committee’s (“FMLC”) June 2013 paper, Discussion of legal uncertainties arising from the Solvency II Directive, which identifies issues of legal uncertainty in the provisions of the Solvency II Directive and how they might be addressed. The Directive 2009/138/EC aims to harmonize European insurance regulation, primarily the capital that companies must hold. The Solvency II Directive was supposed to become effective from January 1, 2014, however delays until 2016 are being suggested.
Rebecca Bryant, a partner in ICX’s Corporate Department and head of Insurance & Reinsurance in Berwyn, who chaired the working group stated: “Some of the ambiguities of the Solvency II Directive are cause for concern for the insurance and reinsurance industries. Our involvement with the FMLC allows us to add our expertise and experience to try and suggest ways to clarify provisions. We have worked closely with industry participants to address key concerns around the implications of the Directive are cause for concern. We are proud to have assisted with this paper, which highlights ways in which ambiguities can be rectified to the benefit of all parties involved.”
The FMLC paper highlights concerns regarding the authorization of third-country branches, minimum capital requirement and solvency capital requirements at the third-country branch level, execution of governance criterion, and the interpretation of the Directive in a group context, the treatment of existing insurance special purpose vehicles, and risk retention rules. The paper outlines suggestions as to how these issues may be addressed.
The role of the FMLC working group was to consider legal uncertainties which might then be clarified. This would be important “for the creation of a more robust and predictable regime for the insurance and reinsurance industry and for the provision of legal certainty across the wholesale financial markets.”