Equivalence and Insurance

20 Pages Posted: 6 Nov 2023

See all articles by Arthur van den Hurk

Arthur van den Hurk

Radboud University Nijmegen, Institute of Financial Law ; EUSFIL Jean Monnet Centre of Excellence

Date Written: November 3, 2023

Abstract

The concept of equivalence is present in various forms in the Solvency II framework, the EU prudential regulatory framework for insurance and reinsurance. While equivalence in Solvency II does not grant or should be equated to market access for market participants that make use of the equivalence instruments within Solvency II, equivalence plays an important role in insurance, in particular in the Solvency capital calculation at group level, group supervision and for the recognition of reinsurance under Solvency II. The conclusion can be drawn that equivalence is an essential building block of the current framework. The application of equivalence in the framework and in practice is discussed in this contribution, and while the application might be complex, it is indispensable. At the same time, other mechanisms, either within the Solvency II framework or more broadly at international, influence the current state and might influence the evolution of equivalence going forward. While inherently there is a political component to equivalence as well, the instruments remain firmly based in (detailed) Solvency II rules and applied accordingly in practice.

Keywords: equivalence, Solvency II, insurance, insurance capital standards, reinsurance

JEL Classification: G15, G22, G28, G38, K22

Suggested Citation

Hurk, Arthur van den, Equivalence and Insurance (November 3, 2023). European Banking Institute Working Paper Series 2023 - no. 156, Available at SSRN: https://ssrn.com/abstract=4622669 or http://dx.doi.org/10.2139/ssrn.4622669

Arthur van den Hurk (Contact Author)

Radboud University Nijmegen, Institute of Financial Law ( email )

Nijmegen
Netherlands

HOME PAGE: http://https://www.ru.nl/ifl/

EUSFIL Jean Monnet Centre of Excellence ( email )

Italy

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