Europe’s mutual and cooperative insurers urge the European Commission to protect much needed diversity in the insurance sector as it finalises the Solvency II requirements.
Brussels, 11 March 2010 “Although the new Solvency II regulatory regime is not intended to restructure the European insurance market it currently risks doing just that,” warned AMICE President Asmo Kalpala prior to the mutual insurance seminar being held in Espoo, Finland on 11 March 2010, “Europe’s mutual and cooperative insurers are therefore calling on the European Commission to maintain diversity and healthy competition within the insurance sector by better balancing consumer protection with consumer choice”.
AMICE initially welcomed the Solvency II Framework Directive which is designed to protect policyholders and the stability of the financial system by optimally aligning capital requirements with risks and enhancing the supervisory review process for Europe’s insurance sector.
“If the principle of proportionality introduced by Solvency II does not work in practice, we are likely to see aggressive market consolidation” notes AMICE President Asmo Kalpala. “Disproportionate governance and reporting requirements pose real challenges for smaller insurers. Similarly, inflated capital requirements will hit mutual and cooperative insurers especially hard.”
The European Commission is currently drafting implementation measures for the Solvency II framework directive after receiving technical advice from CEIOPS, the grouping of European insurance supervisors. The calibrations as currently proposed by CEIOPS do not give consumers the best deal: there is widespread consensus within the European insurance industry that the suggested capital requirements, together with costly obligations in the areas of organisational structure, disclosure and reporting, could see the prices of insurance products rise considerably, at the same time reducing pay-outs, e.g. on pension-type life insurance contracts.
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