13 February 2015

Commercial Risk Europe: FERMA pledges to focus on EU regs in 2015 with captives, SII and ELD top targets

Ferma said the promises will help the federation to meet its strategic objectives: to be a significant stakeholder at European Union level, coordinate and support the development of risk management and ensure sustainability.

The Ferma’s board has laid out its plans for 2015, promising to protect the interests of members at European level on issues such as captive treatment under Solvency II, the Environmental Liability Directive (ELD) and the Insurance Block Exception Regulation (IBER). 

The Federation said it will continue to monitor developments affecting risk managers at EU level, with particular focus on those issues deemed of key importance by members in its 2014 Ferma European Risk and Insurance Survey.

Ferma said one such focus will be Solvency II and in particular its treatment of captives. Solvency II is finally set to come into force on 1 January 2016. The directive's Delegated Act was finally published on 17 January 2015 in the EU Official Journal.

However definition of, and simplifications for, captives remain "restrictive", said Ferma. This could see more onerous Solvency II rules fall on captives.

Under current Solvency II rules, captives eligible for simplification are limited to those that do not have compulsory third-party liability business and only provide cover to undertakings belonging to the group.

This has been an important subject of discussion within the risk management community for several years and a source of concern, said Ferma.

It explained that dialogue between the captive industry and national regulators would continue well beyond Solvency II's 2016 start date.

The Federation has also promised to keep close tabs on the ELD as it comes up for revision in 2015. "Our goal is to ensure that the revision of the ELD planned for 2015 takes into account Ferma's position against mandatory financial security, the extension of strict liability to all operators and the addition of new damages under the ELD regime," said Ferma. Ferma says it will follow the European Commission's (EC) work on the effectiveness, scope and exceptions to the ELD and continue to be part of Insurance Europe's ELD taskforce. In addition, it envisages delivering EU-funded ELD training to member associations.

A further EU topic in Ferma's line of sight is the Directive on Non-Financial Reporting. Following its recent adoption, the EC will, within the next two years, develop specific guidelines on non-financial reporting elements, such as environmental risks, social and employee matters, anti-corruption and bribery policies.

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