The emphasis has been concentrated on the official sector, with the responsibility for implementation and accountability for results being vested with the Government or the regulatory agency. It is now being recognised that the percolation of the compliance to certain standards and codes by the official sector will depend upon improvements in the private sector also.
The European Union urgently needs a new regulatory standard which differentiates solvency charges based on the inherent risk of different lines of business and which provides incentives for enhanced risk management. It urgently needs a framework that takes account of asset risks in an insurance company. It urgently needs a framework that encourages better governance and management of risk.