The FSA has announced that it will concentrate its resources on the biggest insurers when evaluating and considering new FSA Solvency II models.
The FSA will concentrate its resources on the biggest insurers when evaluating and considering new Solvency II models.
At an industry conference on Monday, FSA Solvency II Programme Manager Julian Adams said the watchdog would have to develop a two-tiered approach when looking over firms’ internal model approval process.
Stating that the organisation had to consider a number of constraints over timeframe and regulatory uncertainty, he admitted that the FSA would have to concentrate on a smaller number of firms which represent a more significant share of the market.
Adams said: “We have considered the level of resources we are able to devote to firms going through the pre-application phase and have decided to concentrate these on a smaller population of firms.”
Adams reassured the industry that the new plans will not thwart smaller companies from having models agreed in time to employ the rules by January 2013.
He also said that tools would be developed to help make up for this lack of expert involvement.
He said: “We are proposing to develop various tools to facilitate our review. We think a number of these will assist firms in ensuring that their model development continues in the right direction and will help bridge the gap created by the reduced specialist input.”
The FSA estimates the cost of implementing Solvency II to be close to £100m (€114m/$163m).