Solvency II: delays create breathing room

Bermuda’s decision to adopt Solvency II equivalence has proved the right one for the island, even as the Bermuda Monetary Authority (BMA) slows the pace of implementation. That was the conclusion of a regulatory panel at a conference on Bermuda this week called The Road Ahead organised by Ernst & Young.

David Skinner, chief financial officer and chief operating officer at Aspen, said the BMA’s pursuit of an internationally-recognised regime had proven beneficial to the market – but he also questioned what impact delays to the implementation of the regime would have.

Shanna Lespere, director, international affairs at the BMA, said that Solvency II implementation would likely slip until 2016, with further delays possible. She indicated that delays had enabled the BMA to slow the pace of implementation, rather than getting too far ahead of Europe. “We don’t want to get ahead of global regulation in order to not disadvantage the market,” she said.

Francois Morin, deputy chief risk officer and chief actuary at Arch Capital, described the delays as beneficial, arguing that after a number of false starts it was important the project did not lose credibility by not providing the market with sufficient breathing room to adopt the new measures in a timely fashion. Skinner, however, warned against endless delays, stating that the project's costs have already been significant.