Solvency II leaves UK insurers in limbo

Author: Gemma Varriale | Published: 30 May 2011

UK insurers will struggle to sell subordinated debt without regard to the prospective Solvency II requirements, even though they are not yet in place.

This is the view of financing partner Miranda Leung, who led the Slaughter and May team that worked on Aviva’s tier two issuance.

Aviva was the first UK insurer to comply with both Solvency II and Standard & Poor’s equity credit criteria.

Insurers risk losing their regulatory credit if they fail to take these requirements into account, Leung said. And these are expensive notes to issue if they do not get regulatory credit.

The Solvency II criteria have...