CEA is concerned by some parts of the draft advice which would significantly undermine the efficient operation of the Group Support Regime. The CEIOPS draft advice appears to also impose more stringent supervisory requirements to groups operating under the GSR on elements which are not specifically related to the functioning of the GSR regime. The likelihood that insurers would use group support in practice would be significantly reduced.
CEIOPS appears to view Group Supervision under Solvency II mainly through the perspective of the current regime, as if supervision and capital assessment would continue to be completely solo entity based with the MCR as the primary reference point for supervision, in other words, little change from Solvency I.
This drafting encapsulates a fundamental misapprehension regarding group supervision and the GSR, CEA states. The EC Framework Directive Proposal does not change the individual capital requirements for subsidiaries, but sets out a new approach to group supervision and introduces a new capital instrument in the form of group support that can be used to cover some or all of the difference between the solo MCR and SCR.
CEA is particularly concerned by CEIOPS’ interpretation of Article 246(3)(b) of the Framework Directive Proposal which ‘will be interpreted by CEIOPS in such a manner, that a group actually needs capital in excess of the SCR to the extent that the group support is declared’.
This is in direct contradiction to the Framework Directive Proposal, CEA underlines.
Response on Insurance Groups
© CEA - Comité Européen des Assurances
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