The Standard Formula

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From Skadden, The Standard Formula is a Solvency Two podcast for UK and European insurance professionals. Join us as Skadden Partner Robert Chaplin leads conversations with industry practitioners and explores Solvency Two developments that matter to you. If you’re enjoying The Standard Formula, be sure to subscribe in your favorite podcast app so you don’t miss any future episodes. Additional information about Skadden can be found at Skadden.com. The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. Skadden is recognized for its deep experience in representing insurance and reinsurance companies and their advisers on a wide variety of transactional and regulatory matters. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

Episodes (7)Default

The Edinburgh Reforms: Big Bang 2.0 or Thoughtful Change?2023-01-25

Following the recently introduced Solvency UK for insurers, the British government has announced the Edinburgh Reforms, which propose various amendments to the UK’s financial services sector. These Reforms are the most significant divergences from the EU’s financial services regulations and are intended to secure the UK's status as a leading financial center.In this episode of “The Standard Formula” podcast, Skadden partners Robert A. Chaplin and Greg Norman discuss the proposed amendments and their implications for regulatory change. Rather than viewing this extensive list of reformations as similar to the “Big Bang” of the 1980s — the last dramatic transformational financial reforms in the UK — both Robert and Greg consider the Edinburgh Reforms to be a thoughtful change. Many of the proposals found in the Reforms are aimed at domestic regulations, such as consumer credit, the bank ring-fencing regime and the senior managers and certification regime.  Additionally, The Reforms are targeted at EU legislation considered to be rigid and burdensome to firms. Tune in to hear about the implications of the new Edinburgh Reforms and what it means for the state of the UK moving forward.   🗝️ Key Points 🗝️ Top takeaways from this episode The Edinburgh Reforms are the largest regulatory reforms since the 1980s. When the UK left the EU, the large body of EU legislation that applied directly in the U.K. was transferred onto the UK statute book. The Reforms propose a more flexible system. If implemented, the proposed amendments will allow the UK government to construct a new regulatory regime. The Reforms are expected to change domestic legislation. An objective of the Reforms is to facilitate the international competitiveness of the UK economy, which includes promoting inward investment; supporting innovation and new developments such as crypto, AI and machine learning; and ensuring the UK is attractive to internationally active financial services firms and activities. 💡 Meet Your Host 💡Name: Robert A. ChaplinTitle: Skadden financial institutions partnerSpecialty: Robert focuses primarily on transactional and advisory work in the insurance sector. He advises on M&A, disposals, joint ventures and regulatory matters, particularly those involving UK and EU Solvency II. Connect: LinkedIn 💡 Featured Guest 💡Name: Greg Norman What he does: As an investment management partner at Skadden, Greg focuses on advising private capital businesses on their formation and operations, including private fund capitalization and structuring. Organization: SkaddenWords of wisdom: “Even though the announcement covers a wide spectrum of areas, the proposals are at varying stages of maturity, ranging from the creation of task forces, specific commitments, and announcing certain reviews to cause for evidence and consultations.”Connect: LinkedIn Connect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

12 min

Welcome to The Standard Formula - Solvency Two for Insurers2022-12-14

From Skadden, The Standard Formula is a Solvency Two podcast for UK and European insurance professionals.Join us as Skadden Partner Robert Chaplin leads conversations with industry practitioners and explores Solvency Two developments that matter to you.If you’re enjoying The Standard Formula, be sure to subscribe in your favorite podcast app so you don’t miss any future episodes.Additional information about Skadden can be found at Skadden.com.The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. Skadden is recognized for its deep experience in representing insurance and reinsurance companies and their advisers on a wide variety of transactional and regulatory matters. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

0 min

UK Government Announces Post-Brexit Solvency II Reforms2022-12-19

As part of its departure from the European Union (Brexit), the United Kingdom is moving away from key EU insurance prudential regulatory standards, including by liberalizing the EU Solvency II regime. These reforms can be seen as political as well as regulatory — and if you’re an insurance professional, it is important to understand what these changes mean and how they may impact you. The Solvency II regime came into force in the UK in 2016. The government announced a review of the regime in June 2020, followed by a range of proposed amendments this year.The reformed regime — which will be called Solvency UK — is meant to boost innovation in the sector and assist the government’s drive for investment.This is the first episode of “The Standard Formula,” a podcast from Skadden covering subjects of interest for UK and European insurance professionals in the Solvency II world. Host Robert A. Chaplin — a partner at Skadden — is joined in this episode by Azad as they discuss the UK’s recently announced post-Brexit Solvency II reforms.  🗝️ Key Points 🗝️ Top takeaways from this episode Risk margin. In the government’s final proposals, the risk margin is reduced, using a modified cost of capital method, by around 65% for life carriers and 30% for non-life carriers.Matching adjustment (fundamental spread). There will be no change to the design and calibration of the fundamental spread, save for an increase in risk sensitivity to allow a ‘notched’ approach within credit steps. Additional proposals. Other reforms in the final proposals concern MA (including various steps to liberalize the MA eligibility criteria), requirements for UK branches of foreign insurers, the application thresholds for Solvency UK and a new regime for startup insurers.The full impact remains unknown. Azad speculates that the reforms will bring a number of market impacts, like a degree of investment in infrastructure and clean energy, a new boost for bulk annuity pension deals, innovative approaches to non-conventional assets and more. 💡 Meet Your Host 💡Name: Robert A. ChaplinTitle: Partner at SkaddenPractice: Robert focuses primarily on transactional and advisory work in the insurance sector. His practice includes advising on mergers, acquisitions, disposals and joint ventures, in addition to regulatory matters. Connect: LinkedIn   💡 Featured Guest 💡Name: Azad Ali What he does: Azad leads Skadden’s UK and EU financial services regulation practice, which covers a wide spectrum of sectors, including banking, investment banking, market infrastructure, fintech, asset management, insurance and regulated businesses generally in the London and European markets.Organization: Skadden, Arps, Slate, Meagher & Flom LLP and AffiliatesConnect: LinkedIn Connect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

11 min

Comparing Prudential Solvency Regulatory Regimes2023-09-24

In its simplest form, a prudential solvency regime is designed to ensure insurance policyholders are compensated while allowing insurers to remain competitive and not unnecessarily over-capitalized. The three most significant prudential solvency regulatory regimes globally are Solvency II in the EU and U.K., U.S. risk-based capital (RBC) and the Bermuda Solvency Capital Requirement (BSCR).There are commonalities among the regimes, and they all reflect three main elements: companies need to be conservative in their estimate of liabilities; calculations need to force insurers to invest in assets with an appropriate liquidity and risk profile; and companies must finance an excess of such assets with sufficient capital. Applying each of the requirements alongside real-world complexities often presents a challenge to insurers when looking at each company’s individual business practices.New York-based Skadden partner Patrick Lewis and Neil Horner of ASW Law in Bermuda join host Robert Chaplin to review and compare the various regimes. 🗝️ Key Points 🗝️Top takeaways from this episode ★    Understanding Solvency II★    Regulation in the U.S. ★    Credit ratings are particularly important for Bermuda insurance industry 💡 Meet Your Host 💡Name: Robert ChaplinTitle: Partner at SkaddenSpecialty: Robert advises on mergers and acquisitions, disposals, joint ventures and regulatory matters, particularly with U.K. and EU Solvency II. He primarily focuses on transactional and advisory work in the insurance sector.Connect: LinkedIn💡 Featured Guest 💡Name: Patrick J. LewisWhat he does: Patrick represents acquirers, sellers, targets and financial advisors in a wide variety of transactions, including public and private mergers, acquisitions, dispositions (including auctions), joint ventures, reinsurance, shareholder activism, capital raising transactions and other corporate matters. In recognition of his work, he was named a Rising Star by The Legal 500 US and IFLR1000. Patrick also has received a Burton Award for distinguished legal writing, one of the highest literary honors in law.Organization: SkaddenConnect: LinkedIn💡 Featured Guest 💡Name: Neil HornerWhat he does: Neil joined ASW Law in 2003, prior to which he worked for leading law firms in London, New York and Frankfurt. He is a qualified lawyer in Bermuda, England and New York, with extensive experience working on large commercial, financing, corporate finance and corporate insurance transactions.Organization: ASW LawConnect: LinkedInConnect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

16 min

Bermuda Monetary Authority Proposes Enhancements to its Regulatory Regime2023-09-24

In our latest installment of “The Standard Formula” podcast, partner Rob Chaplin and associate Ilianna Kotini  discuss the proposals made in the Bermuda Monetary Authority's (BMA) latest consultation paper, which are focused on the BMA’s plan to enhance the regulatory and supervisory regime for commercial insurers and insurance groups. The proposals cover four main areas: changes to the calculations of insurers’ technical provisions, amendments to the computation of the Bermuda Solvency Capital Requirement (BSCR), enhancements to the prudential rules and reporting forms set out in the BMA's section 6(d) framework and revisions to the fees charged to life insurers regulated by the BMA. The BMA's proposals aim to bring the Bermuda regime closer to Solvency II, and are of interest to the entire insurance market, given the amount of business that is reinsured into Bermuda.🗝️ Key Points 🗝️ Top takeaways from this episode ★ Technical Provisions Changes ★ BSCR Enhancements ★ Amendments to Section 6(d) Framework ★ Fee Increases for Long-term Commercial Insurers 💡 Meet Your Host 💡Name: Robert ChaplinTitle: Partner, InsuranceSpecialty: Rob advises on mergers and acquisitions, disposals, joint ventures and regulatory matters, particularly with U.K. and EU Solvency II. He primarily focuses on transactional and advisory work in the insurance sector.Connect: LinkedIn💡 Featured Guest 💡Name: Ilianna KotiniTitle: Associate, Financial InstitutionsWords of wisdom: The BMA's proposals are intended to ensure that the regulatory regime for commercial insurers, regulated in Bermuda, continues to be sound and that the rules in place serve the dual purpose of protecting policyholders while also contributing to financial stability. These changes bring the Bermuda regime closer to Solvency II. The changes are of interest to the entire insurance market, given the amount of business which is reinsured into Bermuda. Clearly any strengthening of the regime may have consequences for insurers and reinsurers worldwide, particularly as to pricing.Connect: LinkedInConnect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

15 min

International Association of Insurance Supervisors: Who They Are and Their Industry Impact2023-09-24

In this episode of “The Standard Formula” podcast, partner Rob Chaplin reviews the International Association of Insurance Supervisors (IAIS) with European counsel George Belcher and associate Feargal Ryan from our London insurance team.They discuss how the voluntary membership organization oversees the global standard for the implementation of principles, standards and guidance. Additionally, they discuss the current focus of the IAIS, future developments and the current issues at play. In addition to detailing the IAIS’ three main areas of activity, they discussed how the IAIS fits in with other international bodies. They also discussed the IAIS’ report on the progress of 10 regulatory regimes’ implementation of the association’s framework.💡 Meet Your Host 💡Name: Robert ChaplinTitle: Partner, Insurance at SkaddenSpecialty: Rob primarily focuses on transactional and advisory work in the insurance sector.  He advises on mergers and acquisitions, disposals, joint ventures and strategic reinsurances. He also counsels on regulatory issues, with an emphasis on Solvency II. Connect: LinkedIn   💡 Featured Guest 💡Name: Feargal Ryan What he does: Feargal advises on a wide range of insurance-related transactions, as well as regulatory issues in the insurance sector. Organization: SkaddenWords of wisdom: “The supervisory policy measures are designed to increase the overall resilience of the insurance sector and help prevent insurance sector vulnerabilities from developing into systemic risk.” Connect: LinkedIn 💡 Featured Guest 💡Name: George BelcherWhat he does: George focuses on insurance-related public and private acquisitions and private equity investments, as well as regulatory issues in the insurance sector. He also frequently advises on matters related to Lloyd’s of London.Organization: SkaddenWords of wisdom: “Since Solvency U.K. is not regarded as equivalent in any respect, the question then arises how the U.K. will be able to influence and shape the IAIS in the future. It's possible that the U.K. will increasingly view the IAIS as a means of escaping or perhaps shaping EU influence.”Connect: LinkedIn Connect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

12 min

Back to Basics: Exploring the Many Facets of the Solvency II Regime2023-11-02

This episode of “The Standard Formula” podcast launches the “Back to Basics” series, which will comprehensively cover the U.K.’s Solvency II regime. For the premiere episode, Skadden partner Rob Chaplin and associate David Wang delve into the intricacies of own funds, a core concept of Solvency II.Own funds constitute an insurer's regulatory capital, comprising both balance sheet and limited off-balance sheet items. This discussion covers the three classification categories for own funds: Tier 1 (highest quality), Tier 2 (middle) and Tier 3 (broader spectrum and flexibility). Mr. Chaplin and Mr. Wang outline the specific requirements for each tier. Two characteristics of own funds fundamental to understanding them, namely permanent availability and subordination, are explored in detail.The episode also includes a discussion of regulatory approvals and notifications and the implications of these concepts on the Lloyd's Insurance Market.💡 Meet Your Host 💡Name: Robert ChaplinTitle: Partner, Insurance at SkaddenSpecialty: Rob primarily focuses on transactional and advisory work in the insurance sector. He advises on mergers and acquisitions, disposals, joint ventures and strategic reinsurances. He also counsels on regulatory issues, with an emphasis on Solvency II. Connect: LinkedIn  💡 Featured Guest 💡Name: David Wang  What he does: David is a financial institutions associate in Skadden’s London office. Organization: SkaddenWords of wisdom: “Tier 1 capital is the highest quality and must, therefore, meet the highest standards. There are stringent requirements for a proposed Tier 1 item to meet.”Connect: LinkedIn  Connect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

15 min