The previous Chapter helped to demonstrate that what is best for one party affected by a regulation is not necessarily optimal for all of the affected parties. The situation of captives perfectly exemplified that in practice. Theoretical considerations made in isolation from the market reality demonstrated what type of regulation would be best for captives. Nevertheless, considering the size of captives’ market, their role in the broader market as well as the general objectives of the insurance regulation as such, it is hard to provide convincing arguments as to why captives’ interest should be prioritized. The same conclusion was reached during the development of Solvency II. A number of trade-offs had to be made to make Solvency II a proportional measure for the whole market. The analysis in Chap. 4 and its results presented the essence of the legislative proportionality. Legislative proportionality ensures that the chosen measure accommodates all parties affected. However, because the perfect solutions do not exist, especially in a world of so many diversified interests, it is inevitable that a chosen measure will cause some sort of harm. Thus, although it was recognized as proportional, Solvency II did remain burdensome for smaller insurers, including captives. To reduce this harm, different legislative techniques are introduced. In insurance regulation it is insurance proportionality that was put into effect to ease the burden. The Solvency II framework constitutes the result of the efforts made to accommodate captives without compromising on the general objectives pursued by Solvency II.

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On Proportionality Within European (Re-)insurance Captive Regulation. Analysis of the Effectiveness of Proportionality for the (Re-)Insurance Captives

  • Marta Ostrowska

摘要

The previous Chapter helped to demonstrate that what is best for one party affected by a regulation is not necessarily optimal for all of the affected parties. The situation of captives perfectly exemplified that in practice. Theoretical considerations made in isolation from the market reality demonstrated what type of regulation would be best for captives. Nevertheless, considering the size of captives’ market, their role in the broader market as well as the general objectives of the insurance regulation as such, it is hard to provide convincing arguments as to why captives’ interest should be prioritized. The same conclusion was reached during the development of Solvency II. A number of trade-offs had to be made to make Solvency II a proportional measure for the whole market. The analysis in Chap. 4 and its results presented the essence of the legislative proportionality. Legislative proportionality ensures that the chosen measure accommodates all parties affected. However, because the perfect solutions do not exist, especially in a world of so many diversified interests, it is inevitable that a chosen measure will cause some sort of harm. Thus, although it was recognized as proportional, Solvency II did remain burdensome for smaller insurers, including captives. To reduce this harm, different legislative techniques are introduced. In insurance regulation it is insurance proportionality that was put into effect to ease the burden. The Solvency II framework constitutes the result of the efforts made to accommodate captives without compromising on the general objectives pursued by Solvency II.