CEIOPS has recommended substantial further strengthening of capital requirements for insurers, according to Watson Wyatt, following the publishing yesterday of the body's third round draft advice on the rules for Solvency II. This advice contains more detail on the way in which the capital requirements for insurers will be determined in future and Watson Wyatt believes the impact on insurers will be significant.
Mark Chaplin, global head of risk and value at Watson Wyatt, said: "Following the tightening in standards that we saw in the second round of advice during the summer this is no surprise, particularly given CEIOPS' comments in its March paper on the lessons to be learned from the financial crisis."
According to the firm, market events during the past two years have had a direct influence on the stresses applied to shares, property and corporate bonds and to the assumptions about diversification of risk. The latter change is estimated by CEIOPS to lead to a 25 per cent increase
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