Cyprus Mail

Insurance firms prepared to implement Solvency 2

By Stelios Orphanides

Cyprus’s insurance companies have worked hard with their supervisory authority to prepare for the implementation of the Solvency II European directive, which came into force this year, overhauling capital adequacy and risk assessment standards, Finance Minister Harris Georgiades said on Thursday.

“They are at a good level of preparation, without significant problems related to the implementation of the new framework,” the finance minister told delegates at the Insurance Conference 2016 in Nicosia, according to the emailed transcript of his speech.
Georgiades said the implementation of additional European regulations over the next years, governing insurance intermediaries, insurance companies and their workers, introduces more transparency and professional standards, which will help avoid conflict of interest.

Furthermore, they will also help inform consumers more effectively about insurance products and their cost, he said.

“Despite the challenges that these changes entail, I believe that the implementation of the new European directive will upgrade insurance products and the training of professionals, bolstering public confidence and helping towards the sector’s development,” he said.

Cyprus’s recent financial crisis severely impacted insurance companies. Aggregate premiums dropped in 2014, to €699.3m from €728m the year before, and €779.9m in 2012, according to the Insurance Companies Control Service.

Georgiades also said that Cyprus’s economy, which is projected to expand 2.9 per cent this year after growing 1.6 per cent in 2015, will be growing at one of the fastest paces in Europe this year.
“Unemployment drops, confidence in the banking sector has been to a large extent been restored, important investment projects like ports, marina’s and the casino are in the process of being implemented, (and) public finances are under control with room for considerable tax reliefs,” he said, warning however, that Cyprus should not become complacent.

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