Article on Solvency II by Karel Van Hulle

Solvency II constitutes the biggest change in insurance regulation since the last 30 years.

It took about fifteen years to develop the new solvency regime, which applies from 1 January 2016 to about 5000 (re) insurance undertakings in the European Economic Areas (EAA).

The new regime is obviously also relevant for insurance intermediaries. Indeed, one of the objectives of Solvency II is the establishment of a more mature relationship between insurers and the insurance market. Insurance intermediaries play a key role in that market. Although that role may be changing as a result of increased market conduct regulation, there can be no question that the role of insurance intermediaries as providers of advice in an area that is complex for most buyers of insurance will remain very important.

As a result of Solvency II, the insurance market will become more transparent. Although the public disclosure requirements will only start to apply from 2017 onwards, market pressure will lead (re) insurers to already release important information during the course of 2016. As the information is new and readers of the information are not familiar with the new concepts, the market might overreact and clients might become nervous.

It is important that insurance intermediaries have some knowledge about these new concepts. They cannot be expected to play the role of an auditor or of a financial analyst. However, if they want to continue providing high quality professional advice in the future, they need to know to what extent the information released by insurers is relevant for their clients and what that information means. In this contribution, we will look more specifically at the public disclosure requirements under Solvency II and how these disclosures should be understood

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