View more on these topics

Hoban: Solvency II talks have ‘long way to go’

Treasury financial secretary Mark Hoban says Solvency II negotiations have “a long way to go” as the Government attempts to iron-out issues over capital, the standard formula for generating solvency capital requirements and the ‘illiquidity premium’.

In a speech at the Association of British Insurers this morning, Hoban (pictured) said any changes to the current rules should be “proportionate” and avoid placing “undue burdens” on the insurance sector.

He said: “We still have a long way to go if we’re to get level two to where it needs to be. In this game at least, there’s still a lot to play for.

“It’s important to keep lines of communication with EU officials open because as you well know there remain some outstanding issues.”

Hoban called for a “sensible” definition of liabilities and contract boundaries to be reflected in the directive, with profits from future premiums counting towards the calculation of capital.

He said calibrations for the standard formula should be consistent with the risks of the “average firm”. He also welcomed the FSA’s commitment that the internal model for risk management, which will be used for the analysis of the overall risk of an insurance situation,  will not be benchmarked against the standard formula.

Finally, Hoban said the Government is pressing for a “predictable, automatic and objective” method of discounting annuities, known as the ‘illiquidity premium’.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm