No time like the present

Solvency 2 is still in development but publication of the draft framework directive is now just months away and a tight implementation timetable will follow. In this extract, Sarah Wilson, director of the FSA’s retail firms division speaking from a privileged position of having seen early drafts of the directive - gives some crucial pointers to UK insurers in their planning for the new regime.

Our approach to Solvency 2 has been informed by the same principles that have underpinned our domestic reforms. The prime motivation, underpinning all our more specific objectives, has been to increase focus on risk management, through improved risk measurement and a link to capital planning - and to provide appropriate incentives within the new framework to do all these well. After all, fundamentally the business of insurance is about informed and controlled risk-taking, and regulation should respond to that.