2011-03-15
Most Swedish insurance companies cleared solvency requirements by a good margin. This was the conclusion of the fifth preliminary study, QIS 5, examining the future European insurance regulations Solvency 2, which were carried out in the autumn of 2010.
There were however 21 companies which did not clear the so-called solvency capital requirement, SCR, and 7 companies which did not clear the minimum capital requirement, MCR.
In the new Solvency 2 regime companies which do not clear the solvency capital requirement are required to fulfil the requirement within a reasonable timeframe. Companies which do not meet the minimum capital requirement are required to quickly restore their capital base; otherwise the company must be liquidated.
It is primarily small companies who have difficulty fulfilling the new requirements.
The shortfall in solvency capital in the preliminary study corresponds to 2 percent of the overall capital requirement to fulfil the SCR. The shortfall in fulfilling the minimum requirement, MCR, was 1 percent of the overall capital.
90 percent of the Swedish market took part in the preliminary study (107 insurance companies and 12 insurance groups).
The assessment is based on the reported data and is preliminary. A more detailed analysis has not been carried out. For a more detailed account of the situation in Sweden, see the link below.
EIOPA's presentation of the QIS 5 result for the European insurance industry is available from the link below.
