On 25 January 2011, Guernsey's Financial Services Commission (the GFSC) announced that it had no plans to seek equivalence under Europe's Solvency II regime.

The position that Guernsey would take in relation to Solvency II has been the subject of much speculation in the UK market because of its role as one of the key offshore domiciles for captives. This announcement appears to reflect concern that Solvency II's treatment of captives is far from fully developed.

Guernsey remains committed to meeting the regulatory standards set by the International Association of Insurance Supervisors (IAIS) and will focus on keeping Guernsey's regulatory regime in line with developing IAIS standards. The GFSC is committed to consulting with Guernsey's insurance industry both in the implementation of those IAIS standards and before it makes any further decision in respect of Solvency II equivalence.

The full text of the GFSC's press release can be found by clicking here.