With uncertainty surrounding
Solvency II, the new solvency regime for
It becomes a huge competitive issue in
Part of Solvency II, due to take effect on
European-based companies with U.S. life insurance company subsidiaries include, among others,
The big issue is whether
"Will the EU regulatory authorities tell Allianz that it must significantly raise its capital in
The NAIC isn't happy with Solvency II, Schwartz said, adding it wants products to be affordable. Also, would
In general, Solvency II "and its potentially heavy capital requirements, is one of the reasons life companies would look to sell some of their U.S. operations," said
Earlier this month, Aviva announced the immediate departure of Moss as CEO. Chairman-designate
Another question would be whether fixed annuities, including indexed, with their substantial capital charges, would be much more capital intensive under Solvency II.
Allianz Life Insurance Company of
For life and annuity products, the "most extreme" Solvency II requirements for capital and reserves could come from non-diversifiable risks, such as the financial guarantees, Campbell said. The financial guarantees on variable annuities are "highly correlated" within a block of business, she said.
The NAIC's Own Risk Solvency Assessment implementation is emerging as a "middle ground" in the Solvency II and SMI debate, Mills said.
Kevin M. McCarty, president of the NAIC, told Best's News Service the NAIC is "encouraged by efforts such as the EU’s Solvency II to modernize regimes around the world and improve the international regulation of insurance." While U.S. insurance regulators do not plan to adopt Solvency II, "we are examining the effort through our Solvency Modernization Initiative to find enhancements that might fit our own system," McCarty said in an email.
"It is important that the U.S. and
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|Source:||A.M. Best Company, Inc.|