On August 17, 2011, Connecticut Insurance Commissioner Thomas B. Leonardi released a statement titled “Solvency II: ‘One Size Does Not Fit All’,” in which he warns that adopting Solvency II (as previously reported here) standards in the U.S. could “weaken consumer protections and stability of insurers.”  The comments came during an online forum hosted by Price Waterhouse Coopers regarding, among other topics, solvency regulation.  Commissioner Leonardi stated that implementing Solvency II in the U.S. should not be a requirement in determining mutual equivalence with the E.U., as “[i]t has yet to be implemented or tested in the real world and, in that respect, it is a theory in progress.”  Rather, he suggested a principal based approach that focuses on the objectives of consumer protection, solvency, liquidity and capital adequacy be adopted until the regulatory changes made under Solvency II have been tested and validated.  Without a determination by E.U. regulators that U.S. regulatory process is mutual equivalent, U.S. insurers operating in the E.U. would need to increase their capital to cover claims, putting them at a competitive disadvantaged with their European counterparts.

For a copy of the official press release, click here.