Third country equivalence will be an issue of considerable significance under Solvency II - especially for international insurance and reinsurance groups.
On 1 April 2010, the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) published its final advice on Level 2 implementing measures in respect of the general criteria to be used to assess third country (i.e. non EU) equivalence under Solvency II. In a later phase, the Commission will ask CEIOPS to provide advice on individual country assessments of Solvency II equivalence.
The implementing measures concern reinsurance supervision, group solvency calculations and group supervision.
The advice submitted by CEIOPS to the Commission identifies the key supervisory principles encapsulated in the Solvency II Directive and the objectives that each principle seeks to achieve. CEIOPS advise that, in order to be considered equivalent, a third country regime must meet each of the applicable principles and objectives. For each of the principles and objectives certain indicators are also set out. These indicators are factors which provide guidance in determining whether the relevant principles and objectives are achieved.
The approach set out in the advice is similar to that applied by CEIOPS in assessing the equivalence of third countries under the Reinsurance Directive (2005/68/EC).
For further information:CEIOPS publish final advice on Level 2 measures for third country equivalence under Solvency II