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October 20, 2011, Guest Column

The Implications of Europe’s Solvency II

By Tamiko Toland   Thu, Oct 20, 2011

As Europe raises its bar on insurance regulation, it's in America's best interest to follow suit, writes Ms. Toland, managing director, Retirement Income Consulting, at Strategic Insight.

Europe can seem either close at hand or miles away, especially when it comes to annuities. Across the globe, each country represents a distinct jurisdiction with its own rules regarding retirement vehicles and products, not to mention regulations. Therefore, it is easy to become myopically focused on what is happening on the home front and ignore what may seem like irrelevant trends in foreign waters. However, the impending changes to insurance regulation in Europe in the form of Solvency II could have important implications here in the United States, and not just for multinationals.

Of course, there are many insurers in the U.S. that are part of European parent companies, and there is a possibility that they will ultimately have to conform to the European requirements for their U.S. businesses. In addition, U.S. companies with a European presence will have to deal with similar issues in order to continue to operate over there. However, even for purely domestic insurers, Solvency II may have an enduring effect on the regulation of insurance at home.

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