Insurance Bulletin, 16 June 2016
In this issue: Regulation and legislation; Market developments; HFW publications and events
1. Regulation and legislation
Europe: Solvency II Implementing Regulation published
The European Commission Implementing Regulation (EU) 2016/869 (the Implementing Regulation) setting out information for the calculation of technical provisions and basic own funds for reporting with reference dates from 31 March 2016 until 29 June 2016 in accordance with the Solvency II Directive (2009/138/EC) was published in the Official Journal of the EU (OJ) on 3 June 2016.
The Implementing Regulation is based on technical information provided to the Commission by EIOPA relating to end March 2016 market data.
The Implementing Regulation, which is made pursuant to Article 77e(2) of Solvency II, sets out the technical information that insurers and reinsurers should use when calculating technical provisions and basic own funds for reporting with reference dates from 31 March 2016 until 29 June 2016.
For each currency, the technical information to calculate the best estimate, the matching adjustment (MA) and the volatility adjustment (VA) (in accordance with Articles 77, 77c and 77d of Solvency II respectively) is as follows:
- The relevant risk-free rate term structures set out in Annex I.
- The fundamental spreads for the calculation of the MA set out in Annex II.
- For each relevant national insurance market, the VA set out in Annex III.
The Implementing Regulation, which applies from 31 March 2016, entered into force on 4 June 2016 (the day after its publication in the OJ).
A copy of the Implementing Regulation can be found at: http://tinyurl.com/grvyalp
2. Market developments
UK: Brexit: what it could mean for the London market
The International Underwriting Association, Lloyd’s of London and Fidelis Insurance have published a joint position paper1 warning that Brexit represents a “grave threat” to the London insurance market.
The position paper comments that there is a real concern that if the electorate chooses to withdraw from the European Union on 23 June 2016 a large number of jobs in the market could be at risk. The London commercial insurance sector employs around 34,000 people and approximately 16% of the market’s business comes from other EU countries and this business is only increasing. Membership of the EU enables the London market to sell insurance to 443 million EU citizens who live in the EU and it also allows European insurance companies to invest in the London market. Brexit would likely lead to competing regulatory regimes between Britain and could result in European companies choosing to do business elsewhere with competitors such as Bermuda or Switzerland rather than in London.
UK: LMA Guide to Claims
The latest issue of the LMA Guide to Claims has been published and is available to download at http://tinyurl.com/hsyqqna
This self confessed “bluffer’s guide” is aimed at assisting claims practitioners to better understand current processes and related claims activity and includes an overview of current market initiatives, change and process activities, different market and sector groups and information on the market modernisation programme.
3. HFW publications and events
Holman Fenwick Willan grows international insurance and reinsurance capability with significant hires
HFW has cemented its international development across the insurance and reinsurance practice with the recruitment of Adam Strong who has joined as a Partner in London and Rosie Ng who has joined the firm’s Hong Kong office as a Consultant.
For more information, please see: http://www.hfw.com/HFW-international-insurance-reinsurance-hires-June-2016
North Korea sanctions update, June 2016
HFW have published a briefing1 on the further sanctions which the EU and the US have imposed against North Korea. The briefing analyses the sanctions and examines their significance.
HFW hosts drinks reception for delegation of Nigerian insurers
On Tuesday 7 June, HFW hosted a drinks reception for a delegation of Nigerian insurers. The delegation represented UK Trade and Investment’s first Nigerian insurance sector inward mission to the UK and HFW invited a number of insurance/reinsurance brokers and insurers from the London market, representatives from Commercial Risk Africa and members from the Nigerian British Chamber of Commerce in the UK to join us.
HFW Global head of insurance Chris Cardona gave a welcome to the delegation, and introduced the Deputy Commissioner of NAICOM (the Nigerian insurance regulator), George Onekhena, who also said a few words. In addition, HFW Partner Graham Denny participated in a roundtable discussion with the delegation on Monday which was hosted by JLT.
HFW attends IRLA Congress 2016
HFW Partners Andrew Bandurka and Costas Frangeskides attended the IRLA Congress 2016 in Brighton from Monday 13 to Wednesday 15 June.