Insight and Intelligence on the London & International Insurance Markets

9 February 2012

Latest Solvency II proposals offer Lloyd’s LoC reprieve

19 April 2010

The European Commission's latest Solvency II (SII) implementation proposals look likely to provide some relief to Lloyd's on capital requirements, as the rules on Tier 1 capital are relaxed.

Last month, The Insurance Insider revealed that Lloyd's is facing higher capital demands from the new solvency regime, in part because of its high dependence on letters of credit (LoCs).

Lloyd's holds around 40 percent of its capital in the form of four-party LoCs, which are designated as Tier 2 capital...

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