Andres Avila, associate and Alex Guillamont, director at Kennedys Latin America & Caribbean discuss the positives for Latin America derived from the impending Solvency II legislation in Europe.
Lack of transparency results in distrust and a sense of insecurity. Improper risk management leaves insureds vulnerable and reduces reliability in the insurance industry. It is hoped that Solvency II-type regulation will tackle this in Latin American countries such as Mexico and Brazil, as is the intention in Europe. In Chile, it has been proved to be the right direction to take in terms of solvency requirements for the insurance industry.
"Latin American jurisdictions tend to adapt EU regulations to their local particularities."
In a nutshell, Solvency II is an EU legislative programme intended to review the capital adequacy regime for the European insurance industry and aims to establish revised capital requirements and to modernise supervision and risk management standards to increase protection for policyholders. This programme impacts all 27 EU members, including the UK, from January 1, 2016 at the earliest.
Kennedys, LatAm, Solvency II