Eighteen months after the implementation of EU Solvency II, Malta and Luxembourg treat captive insurers differently from commercial insurers in policy enforcement.

        All (re)insurance companies registered in the EU are subject to Solvency II supervision, under which the principle of proportionality applies to small insurers and certain captive insurers.

        Captive insurers in Luxembourg may be exempted from quarterly reporting when they meet the minimum capital requirements, or when their solvency ratios have not changed. Except for certain large captive insurers and captives owned by insurance groups, where public interest considerations apply, Luxembourg exempts most captive insurers from quarterly reporting.

        Malta, for its part, believes that captive insurers bear greater responsibility than regulators for upholding the principle of proportionality. The principle of proportionality is proposed by the company to the regulator, requiring the company to demonstrate to the regulator, in a transparent manner, the reasonableness of the proportionate approach within its business model. A captive insurer can reach consensus simply through constructive dialogue with the regulator, which also explains why the European Insurance and Occupational Pensions Authority (EIOPA) has not issued hard rules on proportionality requirements.

       In contrast to the relatively optimistic attitudes of Luxembourg and Malta toward captives' implementation of Solvency II requirements, the Irish regulatory authorities are more cautious. In May 2017, the Central Bank of Ireland reversed its earlier decision to exempt captive insurers from reporting.