Guernsey will not be seeking Solvency II equivalence, with the island’s financial regulators raising doubts over the benefits of mutual recognition status for its captive industry, according to a report in Business Insurance.The States of Guernsey Commerce and Employment Department and the Guernsey Financial Services Commission, which regulates captives and insurers, released a joint statement yesterday saying they have no plans to seek equivalence under the risk-based capital regulatory regime slated for introduction in the European Union in 2012.The announcement could prove attractive to captives based in jurisdictions outside the European Union, including Bermuda and Switzerland, considering redomiciling and who do not want the added burden of having to meet Solvency II equivalence.Guernsey, the fourth-largest captive domicile in the world, is a UK crown dependency but is not a member of the European Union.In the joint statement, the regulators said Guernsey “remains committed to meeting internationally accepted regulatory standards as set by the International Association of Insurance Supervisors and endorsed by the G20”.The regulators also said they will monitor the development of Solvency II and whether full or partial equivalence with the regime might be beneficial to the island and consult with the insurance sector before a final decision is made.In the statement, Peter Niven, chief executive of Guernsey Finance, which promotes the island’s financial industry, said it is not believed that seeking equivalence under Solvency II would be an advantage to the captive industry in Guernsey at the moment.“Indeed, the treatment of captives under Solvency II remains uncertain and so we will be keeping a close eye on this,” Mr Niven said.Dominic Wheatley, managing director of Willis (Management) Guernsey Ltd. and chairman of the Guernsey International Insurance Association, said the stance may aid the domicile’s appeal.“We believe that the position the island has adopted will enhance Guernsey’s attractiveness as a domicile to captive owners and other niche insurers looking for a regulatory environment that responds to the smaller scales of business and simpler business models typical of their businesses,” he said in the statement.While Guernsey is not seeking Solvency II equivalency, other jurisdictions outside the European Union, including Bermuda and Switzerland, are seeking the mutual recognition status.