12 March 2014
Sergio Balbinot, the president of industry lobby group Insurance Europe, has warned that draft measures aimed at implementing the European Union’s Solvency II capital regime will have a negative impact on the continent’s insurers, if left uncorrected.
Balbinot said that the drafted Delegated Acts, legislative provisions made by the European Commission to supplement a directive, were contrary to legislators’ intentions.
Areas of concern included unnecessarily high risk charges for long-term investments and the negation of third-country equivalence.
“If not corrected, the Delegated Acts would seriously limit insurers’ ability to provide the long-term investment and stability Europe’s economies need,” said Balbinot.
“They would have a major impact on the availability and price of insurance products, and would harm the ability of European insurers to compete internationally,” he added.
Solvency II, which is designed to protect policyholders by making (re)insurers hold capital reserves in strict proportion to the risks they underwrite, has been under discussion for more than 13 years.
Originally scheduled to take effect in 2012, the legislation was repeatedly postponed due to wrangling between EU governments and regulators over the final rules.
Yesterday (11 March), the European Parliament voted in favour of the Omnibus II directive, a set of technical measures that will finalise the new framework and prevent further delays.
It is a formal adoption of the agreement reached by officials in November 2013, which created a revised deadline for the rules to come into force in January 2016.
At the time, Insurance Europe gave a cautious welcome to the agreement, describing it as “a workable base from which to develop the technical details of the new regulatory regime”.
