CHICAGO--(BUSINESS WIRE)--As U.S. insurance companies assess an evolving regulatory landscape for their industry, Northern Trust recently hosted a webinar exploring the implications of three major initiatives: a move to incorporate International Financial Reporting Standards (IFRS) in U.S. statutory accounting principles; the implementation of the Dodd-Frank Act; and regulatory requirements under Solvency II in the European Union.
“There is a great deal of discussion around changes to the insurance regulatory landscape with potentially significant accounting, reporting and financial impacts,” said Dennis Case, Senior Insurance Product Manager at Northern Trust, who hosted the webinar. “As part of our consultative approach to our business, we want to help our clients wade through the issues to understand the implications of these changes on their plans.”
Case and panelists George Shore, a consultant with Deaver Logic LLC, and Kathleen Dugan, EMEA Insurance Product Manager at Northern Trust, discussed challenges these regulations will present, including:
- Significant accounting and reporting ramifications of the move from statutory accounting used by most U.S. insurance companies, to the global accounting standard IFRS. Case explained the potential impact on underwriting capacity, risk-based capital adherence, portfolio management, investment strategy and trading practices of insurance companies.
- The Dodd-Frank Act’s establishment of a Federal Insurance Office within the Department of the Treasury could impact statutory regulations of insurance companies, according to Shore. Dodd-Frank’s changes to rules on derivatives, the “Volcker Rule” on proprietary trading and rules governing liquidations will all impact insurance firms to some degree.
- The Solvency II reforms will revolutionize capital requirements and risk management standards across the European Union, said Dugan. The key to compliance will be high quality data, which is essential for appropriate modeling.
“Even if U.S. insurance companies have no European subsidiaries or parent companies, they need to pay attention to Solvency II, which is the most sweeping regulatory change that people now working in the insurance industry have ever experienced,” Dugan said. “We do not expect to see a global regulatory regime, but insurance regulators in the U.S. and other countries are looking closely at Solvency II to assess its success in protecting consumers and managing systemic risk as it relates to the insurance industry.”
A complete replay of the webinar is available on Northern Trust’s website at northerntrust.com.
Northern Trust provides a full range of asset servicing and asset management solutions, including global custody, investment operations outsourcing and investment sub-advisory services, to a broad spectrum of insurance clients across the globe. Northern Trust's insurance client base and expertise encompass life, general, pensions, protection and indemnity, captives and the specialist Lloyd's insurance market in the UK.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2011, Northern Trust had assets under custody of US$4.4 trillion, and assets under investment management of US$662.2 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com.
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- The Northern Trust Company, London Branch (reg. no. BR001960), Northern Trust Global Investments Limited (reg. no. 03929218) and Northern Trust Global Services Limited (reg. no. 04795756) are authorised and regulated by the Financial Services Authority.
- Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services (Guernsey) Limited, and Northern Trust International Fund Administration Services (Guernsey) Limited are licensed by the Guernsey Financial Services Commission.
- Northern Trust International Fund Administrators (Jersey) Limited and Northern Trust Fiduciary Services (Jersey) Limited are regulated by the Jersey Financial Services Commission.
- Northern Trust International Fund Administration Services (Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are regulated by the Central Bank of Ireland.
- Northern Trust Global Services Limited has a Netherlands Branch which is authorised and regulated in the Netherlands by De Nederlandsche Bank.
- Northern Trust Global Investments Limited has a Netherlands branch which is authorised by the Financial Services Authority and subject to regulation in The Netherlands by the Autoriteit Financiële Markten.
- Northern Trust Global Services Limited has a Luxembourg Branch which is authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF).
- Northern Trust Luxembourg Management Company S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF).
- Northern Trust Global Services Ltd (UK) Sweden Filial is Authorised by the Financial Services Authority and subject to regulation by the Finansinspektionen.
- Northern Trust Global Investments Limited has a Sweden branch which is authorised by the Financial Services Authority and subject to regulation in Sweden by the Finansinspektionen.
- Northern Trust Global Services Limited operates in Abu Dhabi as a Representative Office, Licence number 13/238/2008 which is authorised and regulated by the Central Bank of the United Arab Emirates.
- The Northern Trust Company operates in Canada as The Northern Trust Company, Canada Branch which is an authorized foreign bank branch under the Bank Act (Canada). Trustee related services in Canada are provided by the wholly owned subsidiary The Northern Trust Company, Canada, an authorized trust company under the Trust & Loans Companies Act (Canada). Deposits with The Northern Trust Company and its affiliates and subsidiaries are not insured by the Canada Deposit Insurance Corporation.
- Northern Trust operates in Australia as a foreign authorised deposit-taking institution (foreign ADI) and is regulated by the Australian Prudential Regulation Authority and the Australian Securities & Investments Commission (AFS Licence No: 314970).
- The Northern Trust Company of Hong Kong Limited is a securities company regulated by the Securities and Futures Commission.
- The Northern Trust Company has a Singapore Branch which is a foreign wholesale bank regulated by the Monetary Authority of Singapore.
- The Northern Trust Company has a branch in China regulated by the China Banking Regulatory Commission.
- Northern Trust Global Investments Japan, K.K. is regulated by the Japan Financial Services Agency.