Welcome to the April edition of the IMU newsletter which provides you with a summary of the latest accounting, actuarial and regulatory developments in the insurance market.
In this edition you can find out more about the following topics:
- ABI response to Solvency II proposals.
- CEIOPS issues Solvency II consultation papers.
- CEIOPS publishes lessons learned from the financial crisis.
- CESR issues report on the Lehman collapse.
- FSA publishes General and Life Insurance Newsletters.
- IASB releases Exposure Draft on derecognition of financial instruments.
- IASB releases Exposure Draft on Income Tax.
- About this newsletter and the Insurance Centre of Excellence.
This newsletter is prepared by the Deloitte Insurance Centre of Excellence (ICoE). We hope you find it informative and would welcome any feedback or suggestions you may have.
ABI Response To Solvency II Proposals
On 26 March 2009, the Association of British Insurers ("ABI") issued a response to the Solvency II directive recently agreed in Brussels. While overall supportive of the directive and the embedded risk-based approach, the ABI indicated that they were disappointed that the directive did not address the problems of regulating groups operating across borders, especially in view of the results of the De Larosiere report.
Interactive link to related information
ABI News Release
CEIOPS Issues Solvency II Consultation Papers
On 26 March 2009, the Committee of European Insurance and Occupational Pensions Supervisors ("CEIOPS") issued 12 consultation papers containing draft advice on the Level 2 implementing measures. The consultations were developed on the basis of the approach outlined in the Solvency II Directive proposal, and views are sought from interested parties with closing dates throughout May and June 2009.
Interactive links to related information
CEIOPS Consultation Papers
CEIOPS Covering Letter (pdf)
CEIOPS Publishes Lessons Learned From The Financial Crisis
On 27 March 2009, the Committee of European Insurance and Occupational Pensions Supervisors ("CEIOPS") issued a press release in which the CEIOPS' Members Meeting endorsed the project results 'Lessons to be learned from the crisis – Solvency II and beyond' completed by the CEIOPS Working Groups.
Among other things, the report reiterated the importance of the Solvency II project, suggested the need for further refinements of the existing calibrations in the Level 2 and Level 3 modules, and identified elements of governance, risk management and internal control that need to be strengthened within the insurance sector.
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CEIOPS Press Release (pdf)
CESR Issues Report On The Lehman Collapse
On 23 March 2009, the Committee of European Securities Regulators ("CESR") published a report on the Lehman collapse, titled 'The Lehman Brothers default: an assessment of the market impact'. The report focused on the reasons for the collapse of Lehman Brothers, along with a summary of market impacts resulting from the collapse, and noted potential actions for regulators in order to improve regulation and reduce the risk of another such event.
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CESR Publications
FSA Publishes General And Life Insurance Newsletters
In early April 2009, the Financial Services Authority ("FSA") published the latest editions of the General Insurance Newsletter and the Life Insurance Newsletter. These newsletters contain updates on the FSA's regulatory work over the past quarter, along with other relevant topics. Of particular interest are:
Life And General Insurance
- Notification regarding the new waiver by consent available to insurance firms with exposures to entities which have HM Treasury as a common shareholder.
- An update on the status of Solvency II, QIS 4 and additional fees to cover the FSA's Solvency II implementation costs.
General Insurance
- The developments in the PPI market arising from the Competition Commission's final report.
- The results of the FSA's review of insurance comparison websites, which concluded that further improvements are necessary to websites and processes.
- The endorsement of the transparency and disclosure industry guidance developed by the British Insurance Brokers Association and the London and International Insurance Brokers' Association.
- Updates to the Handbook to include further guidance on passporting under the Reinsurance Directive and a notification requirement for UK pure reinsurers carrying on business in another EEA state.
Life Insurance
- The results of a number of Treating Customers Fairly reviews conducted by the FSA into the provision of pensions.
Interactive link to related information
FSA Publications
IASB Releases Exposure Draft On Derecogntion Of Financial Instruments
On 31 March 2009, the International Accounting Standards Board ("IASB") released an Exposure Draft titled 'Derecognition: Proposed amendments to IAS 39 and IFRS 7', with a comment period closing on 31 July 2009. This Exposure Draft aims to implement changes converging the Standards with US GAAP and to implement improvements reducing the difficulties applying the Standards in practice. These proposals include additional guidance on complex areas and changes to remove internal inconsistencies.
Interactive link to related information
IASB Exposure Draft (pdf)
IASB Releases Exposure Draft On Income Tax
On 31 March 2009, the International Accounting Standards Board ("IASB") released an Exposure Draft on Income Tax, with a comment period closing on 31 July 2009. This Exposure Draft sets out a proposed International Financial Reporting Standard ("IFRS") designed to replace IAS 12 'Income taxes'. The proposed revisions arise in order to clarify the provisions of IAS 12 and to reduce differences between IFRS and UK GAAP. The most significant changes in this Exposure Draft include a change to the definition of 'tax basis', modifications to the deferred tax approach and the removal of a number of exceptions to simplify the standard.
Interactive link to related information
IASB Exposure Draft (pdf)
Any Comments Or Questions About This Newsletter?
This publication is designed to keep readers abreast of current developments, but it is a general guide only and is not intended to be a comprehensive statement of the law or regulations and not an exhaustive treatment of those current developments. Accordingly, the information in this publication is not intended to constitute accounting, tax, legal, investment, consulting, or other professional advice or services. It therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication.
Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. If you would like more information or would like to discuss any of the issues set out in this newsletter please contact your usual Deloitte contact or any of the ICoE team listed below and they will be pleased to help you.
Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.
The Insurance Centre Of Excellence
The Deloitte Insurance Centre of Excellence (ICoE) is a dedicated technical group, within our insurance practice, with a reputation for outstanding technical quality and thought leadership embracing senior professionals from all areas of the business.
We play a guiding role in our profession and liaise with industry and trade bodies – an inside track on the latest accounting and regulatory changes means that we are perfectly placed to advise on current issues. We understand the insurance market and as part of a significant practice with a wide breadth of expertise the ICoE team can draw on a blend of skills to deliver outstanding financial, actuarial, tax, commercial and regulatory advice and knowledge that addresses the issues and challenges facing the industry.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.