In the world of insurance regulation, pressure continues to mount for the United States to adopt global standards. As worldwide networks continue to grow and expand, cross-border transactions have increasingly become the standard for doing business. Even insurers who do all of their businesses in the U.S. are not immune as calls arise for modernization and harmonization of insurance regulations and standards across borders.
For the insurance industry, nowhere is this phenomenon more apparent than in the area of solvency modernization. With the recent financial turmoil serving as an impetus for the development of tools that enhance risk awareness, capital standards, corporate governance, and disclosure and transparency, the race toward a uniform global solvency framework is on, via the European Commission’s Solvency II Directive.
This issue of Forward Focus, Solvency II from a U.S. perspective, lays out the key principles of Solvency II and discusses the expected impact of Solvency II on U.S. insurers.
Specific topics addressed include:
- The three pillars of Solvency II
- The four-level implementation process
- How IFRS plays into the mix
- Related activities at the NAIC and IAIS
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