QIS5 restricts diversification benefits
July 06, 2010
THE FINAL specifications for the fifth Solvency II quantitative impact study do not allow for diversification between entities within a group, which may accelerate movement towards a branch structure. The European Commission has finally published final specifications for QIS5, due to take place between August and November this year, and has removed provisions in the draft document to allow for the effects of diversification between entities under the Solvency II regime. Charles Garnsworthy, partner at PricewaterhouseCoopers, said: “It is unclear whether the final Level 2 requirements will allow diversification between entities or not. “If it doesn’t, it may cause people to rethink the way they are structured and may cause companies to look towards a branch structure.” “I’d expect QIS5 to trigger questions around structure, portfolios of business and product design,” he said. “For companies which have not carried out an...