The impact of new European legislation on the insurance sector

PwC Cyprus and IAC presented the changes to the regulatory solvency system of the insurance sector

Developments in the European institutional framework and how these impact on the insurance sector were the focus of an event held by PwC Cyprus and the Insurance Association of Cyprus (IAC), on 16 December in Nicosia.

During the event, attendees were updated on the new legislation governing the duties of the Board of Directors and the Audit Committee of each organisation as well as on the disclosure requirements as defined in the “Solvency II” institutional framework.

Addressing the event, PwC Cyprus CEO Mr Evgenios Evgeniou said: “The new legislation constitutes a major challenge for all of us and particularly the insurance sector, as it involves changes that directly impact on European regulations on the solvency of insurance firms’. Therefore, it is imperative for businesses of the sector to familiarise themselves with the new European legal framework, adopting the best practices that will enable them to flourish. We are by our clients’ side during this process and continue to support Cypriot businesses with the expertise and experience of our executives.”

On her part, the Director General of the Insurance Association of Cyprus, Ms Stephie Dracos, stated: “The central aim of this legislative armoury is to safeguard strong governance for insurance companies, that is to create all the preconditions required for healthy and modern insurance companies in all aspects. These objectives are further boosted with the new framework being introduced with the harmonised legislation regarding auditing services. This new framework aims to improve the quality of company audits to make their governance more effective and entrepreneurship stronger, which will contribute to further economic growth.”

Presentations were made, analysing in detail the role and responsibilities that each organisation’s Board of Directors and Audit Committee should have, as well as the various aspects of the new law. Reference was made to the composition of Audit Committees and how these should be governed, the way in which auditors should be selected and appointed, how their independence should be supervised and the audit reports that they will compile.

As the speakers stressed, the new institutional framework has brought the biggest change to the regulatory framework regarding the solvency of the European insurance sector’, as it requires companies to submit more information and subjects them to stricter controls. The new law’s provisions create challenges, which however could make the sector easier to comprehend and evaluate, which could in turn help it overcome the conditions of uncertainty and lack of comparability that characterise it.

It is worth noting that the event falls under PwC Cyprus’ support programme for Cypriot businesses that aims to utilise the organisation’s specialised knowledge to the benefit of the local business community.

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Konstantina Logotheti

Director - Marketing & Communications, PwC Cyprus

Tel: +357-22555108

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