The ABI has commented on the results of the second quantitative impact study (QIS2), published by CEIOPS (the European committee of insurance regulators) and the FSA.  QIS2 is the second of three studies accompanying the preparation of the Solvency 2 Directive.  The studies test the effect of different models for the valuation of assets and liabilities on the capital requirements of insurance companies. 

Peter Vipond, the ABI’s Director of Financial Regulation and Taxation, said:

“QIS2 has provided a good opportunity to test the overall framework of Solvency 2 and to identify where it needs refining.  There is clearly further work ahead in ensuring parameters reflect the underlying risks on both the asset and liability sides of the balance sheet.

“We are now urging all insurance companies, in particular smaller firms, to participate in the forthcoming QIS3 study so that the capital requirements in Solvency 2 appropriately reflect the underlying risks”.

In Spring 2007, CEIOPS will conduct a third study (QIS3) to finalise its advice to the European Commission regarding capital requirements.

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