Andrew Dyer, of the FSA, addressed delegates and representatives of the London insurance and reinsurance legacy sector following yesterday's ARC annual AGM, in what has become something of a traditional annual update and commentary from the sector's Regulator.

Solvent Schemes of Arrangement and Solvency II were (perhaps inevitably) prime topics of interest on which the FSA wanted to comment.

Mr Dyer reminded the meeting of the FSA's 2007 Process Guide to solvent schemes of arrangement, and commented that the market was producing ever more innovative and sophisticated applications of the solvent scheme solution. This was (again, perhaps inevitably) causing the FSA to look at their guidelines and to apply an evolutionary approach to their development and application.

Mr Dyer reminded and warned delegates that whilst the FSA operated on the basis of an 8 week review process, for scheme proposals, their task was not made easier by the lateness of some developers' contacts with the FSA. He emphasised that the earliest possible contact and dialogue with the FSA was a crucial part of the process. Certain recent proposals had indeed not been able to go forward, as, following initial discussions, they clearly did not meet the FSA's standards. Mr Dyer observed that the expenditure of much time and cost for the proponents could have been avoided if only an early contact had been made.

The FSA was looking particularly closely at situations where schemes were sought to be combined with other processes, such as Part VII Transfers.

More dialogue was essential, and applicants should be prepared to engage early, and supported by suitable independent analyses such as legal opinions.

The FSA was, as ever, particularly keen to understand fully the likely impact on policyholders of these complex processes, and would expect the applicant to be fully prepared to engage in constructive dialogue to that end.

Solvency II was still an evolving regime, with further studies on-going (Omnibus 2) which were expected to shed further light on the impact of the process on the legacy sector after 1Q 2012.

The changed dates for Solvency II implementation had led to what was termed "bi-furcation", with the regulatory process embedded as from 1 Jan 2013, and firm's compliance expected by 1 Jan 2014. Many data exchanges during 2013 were anticipated as a result, and, with very few run-off firms seeking to adopt the IMAC or internal model, Mr Dyer confirmed that the doors would be open for applications from firms wishing to use the standard model from 1 Jan 2013.

He recommended that firms pay close attention not only to the headline aspects of capital and Pillar I, but to remember that Pillars II and III, and in particular aspects of governance, would be of significance as well as the raw capital requirements.

The ARC AGM itself, which formed the backdrop to the event, had previously signalled a process of consultation on a change of name for ARC – to the "International Legacy Association" – but otherwise no real changes of significance to the sector save for the onward march of further consolidation within the industry, leading to a dropping off of some members as a result – but any reduction in the existing membership was balanced by an influx of new overseas members, showing a renewed focus on the issues of run-off (or "legacy", as it must now be known!) outside the traditional London market.

The wave of consolidation in the London legal market was wryly commented upon by the ARC team as an almost equally noticeable feature of 2011.

Paul Corver, Chairman of ARC, Luke Tanzer, Treasurer, and Mark Everiss, Company Secretary, all apologised for what they described as somewhat "dry" formal aspects of the AGM.

ARC was, apparently, however, proceeding steadily through relatively steady or flat market conditions, with some activities and events being over-subscribed, and others perhaps in need of a change. The ARC Academy, now led by Julian Miller, as successor to its original founder, Bill Bower, continued to attract high plaudits from delegates, and benefited from great support from the many professional firms who facilitated its events and venues.

The gathering concluded with a lively debate, moderated by Peter Taylor of Hogan Lovells, who was charged with getting a panel of experts from the industry to share their thoughts on whether the Legacy (indubitably the "buzz" word of the day) sector had "any surprises left to offer".

Dan Schwarzmann of PwC, backed up by Mark Allen on the actuarial front, swapped ideas and predictions for the future with Paul Corver, of R&Q, Chairman of ARC, and Martin Rebisz, putting the "European" viewpoint as an IntAP representative and long-term denizen of the run-off sector from long before "legacy" was a word.

Their rapid-fire interrogation by the moderator and expert opinions and views, mixed with questions and comments from the floor, ensured that the level of debate was both informed and informative.

The Supreme Court's decision on the Scottish legislation to recompense people with pleural plaques excited much comment, as did the stability and volatility of APH reserves generally in the face of such seismic legal challenges – not forgetting the impending resolution of the UK EL Trigger cases.

The Panel was unanimous in regarding the Legacy sector as being here and active for decades to come, whether resolving the issues of traditional pre-1985 APH, or dealing with the vast upsurge of more recent run-offs, such as those in the motor sector, as well as the "unknown unknowns" lurking in the wings.

Whether "Run-Off" or "Legacy" is the correct term, all agreed that the delegates were likely to be still meeting for many years to come.