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 Chaplin

Title: Partner, Insurance at Skadden

Specialty: 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: Skadden

Words 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 

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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.