HC Deb 31 March 1993 vol 222 cc207-8W
Mr. Cousins

To ask the President of the Board of Trade whether any insurance company is currently in breach of its solvency margin.

Mr. Neil Hamilton

Yes, and those that are in breach are the focus of regulatory action.

Mr. Cousins

To ask the President of the Board of Trade what exemptions from normal Companies Acts disclosures are allowed to insurance companies.

Mr. Neil Hamilton

They are entitled to draw up their accounts in accordance with schedule 9A of the 1985 Companies Act, instead of the usual schedule 4, and may obtain various exemptions from disclosure in that way.

Mr. Cousins

To ask the President of the Board of Trade what are the required solvency margins of insurance companies; what monitoring of these margins is undertaken by his Department; and in what form the results of this monitoring are published.

Mr. Neil Hamilton

The margin of solvency for each insurance company is determined in accordance with part II of the Insurance Companies Regulations 1981. The principal method of monitoring the margin is the examination of the annual accounts and statements submitted in accordance with the Insurance Companies (Accounts and Statements) Regulations 1983. Copies of these accounts and statements, which include the solvency margin calculation, are available from Companies House. The Department's own monitoring results are not published.

Mr. Cousins

To ask the President of the Board of Trade whether insurance companies are required to show equity assets at current market values in their accounts.

Mr. Neil Hamilton

In their accounts filed under the Companies Act 1985, schedule 9A allows equity assets to be valued at either cost or market value. In the annual returns made under the Insurance Companies Act 1982 it is normal to show equity assets at middle market value in accordance with section 46 of the Insurance Companies Regulations 1981.

Mr. Cousins

To ask the President of the Board of Trade what action his Department takes when it discovers an insurance company has breached its solvency margin.

Mr. Neil Hamilton

The Department issues a notice in accordance with either section 32 or section 33 of the Insurance Companies Act 1982 requiring the company to submit a plan to restore a sound financial position or, in the case of the latter, a short-term financial scheme. It is also usual practice to hold a meeting with the company as a matter of urgency to try and establish what has caused the breach and to discuss remedies.