SOLVENCY MARGINS

Keith Nuthall
EUROPEAN Union ministers have approved two new directives that toughen EU-wide rules insisting that insurance companies have deep enough financial reserves to meet their policy commitments in the most unexpected of circumstances.

These solvency margin directives, (one for life insurance and the other for non-life), increase the minimum amounts of capital that must be held by these companies, (the so-called minimum guarantee fund). The new floor would be Euro 3 million, (Euro 2 million for some classes of non-life insurance), compared to ...


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