On 14 July 2010, the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) published its draft advice on equivalence assessments to be undertaken in relation to three areas of the Solvency II directive, being reinsurance, group supervision and group solvency. CEIOPS proposes that in its first wave of assessments, Bermuda and Switzerland should be considered for equivalence in all of these areas and Japan in respect of reinsurance only.
CEIOPS notes that "advice on possible countries should focus primarily on the risk based nature of the third country regime and the materiality of an equivalence finding to EU insurance and reinsurance undertakings and their policyholders." When considering these factors, Bermuda, Switzerland and the US scored highly and all were considered of importance to the EU market. That Bermuda has been highlighted will be a fillip for the jurisdiction, as it follows significant work by the Bermuda Monetary Authority to ensure that it achieves equivalence with Solvency II.
The particular difficulties in making an assessment of US equivalence, combined with the resources required to undertake multiple simultaneous assessments, led to CEIOPS proposing not to undertake an equivalence assessment of the US at this stage. The door is not closed, however, as the draft advice sets out a possible process to assess US equivalence should the European Commission decide that the US should be in the first wave.