1. 1 A proper solvency framework for the insurance industry Tommy Persson President, CEA

2. 2 Solvency II Strongly supported by CEA Harmonizes regulation and supervision Risk based model Fair value

3. 3 Why excessive capital requirements harm consumers, insurers and the economy Risk capital decrease International competitiveness Premium increases Underwriting capactiy reduced Lack of investors Return on pension capital

4. 4 Insurance, a unique sector Why insurance is different from banks No liquidity risk ALM Technical reserves SCR Runoff methods Slower pace Low interconnection

5. 5 Open issues Finding the right balance Consistency with the frame work directed Future profits Simplification Propotionallity Own funds Calibration of risk Regulatory arbitrage

6. 6 Open issues Internal models Basel III Regulation or directive Are supervisors ready