HC Deb 25 October 1976 vol 918 cc19-20W
Mr. McCrindle

asked the Secretary of State for Trade in how many cases in 1976 the introduction of new solvency requirements for insurance companies have led to technical insolvency; how many dispensations have been granted; and if he plans to modify the requirement in the light of experience.

Mr. Clinton Davis

All insurance companies authorised since 1st February 1976 to carry on non-life insurance business of any class have been required to meet higher minimum solvency requirements in conformity with our EEC obligations. This has led to no technical insolvencies or dispensation.

The Insurance Companies (Valuation of Assets) Regulations 1976 (S.I. 1976/87), which came into force on 1st May 1976, set out rules for the valuation and admissibility of insurance companies' assets for various purposes, including assessment of solvency under the Insurance Companies Act 1974. The majority of companies have not yet had to deposit with the Department audited balance sheets taking account of regulations. As was fully expected, a number of companies will need additional time to rearrange their investments in the light of these new requirements. Up to 22nd October, 17 dispensations have been granted to 14 companies under Section 57 of the Act to allow for this.

I have no plans to make significant modifications to the 1976 regulations but I am considering with the industry certain difficulties of detail which have arisen in practice.