![]() European and Global Insurance Market being welcomed as a revolutionary legal framework which will turn the European insurance business into a competitive and prosperous sector. As of January 1, 2016, the Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 as amended by the Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014, will be in force throughout the Member-States of the European Union (EU). It will replace the Council Directive 87/344/EEC of 22 June 1987, on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance. The new Directive is titled "On the taking-up and pursuit of the business of Insurance and Reinsurance" or in short, "Solvency II." The new Directive implements a framework of regulations and technical standards to be met by insurance and reinsurance companies established and operating in any EU member-state in order to improve their efficiency and particularly, their risk management. The Directive is driven by the need to harmonize the market and to modernize the insurance industry after its weaknesses were exposed by the recession that swept through the EU. Solvency II aims to reduce the risk of failure of such undertakings to the minimum i.e. 0.5 percent possibility of failure. By minimizing the risk of failure and increasing the efficiency of undertakings, the Directive will effectively reduce the undertakings' operational costs thus enabling them to reduce the basic premium payable by the policyholders. The implementation of the Directive is expected to benefit undertakings outside the EU as well. Both non-EU undertakings with EU subsidiaries and EU undertakings with non-EU subsidiaries will be forced to incorporate depending on their corporate structure some of the Solvency II provisions. In addition, the drastic changes in the European insurance sector will encourage undertakings based in third countries to review their operational and risk management strategies in order to keep up with their European competitors. Solvency II certainly seeks to pave the way for the insurance single internal market & Co. LLC based in Limassol, Cyprus. He is an accredited mediator for civil, commercial and banking cases. His main areas of practice are insurance law, personal injury, banking law, contractual disputes and intellectual property. 10 Omirou Street Limassol, Cyprus 3095 hartsiotis.com |