Comments on the proposed directive for Institutions for Occupational Retirement Provision.
Insurance Europe supports the enhanced governance requirements, which are in line with well-established rules for financial service providers. Insurance Europe also welcomes the aims of increasing transparency, through the information provided to both potential and existing members, and beneficiaries.
It stresses, however, that it should be left up to the member states to decide how to provide the necessary information. The requirements should be sufficiently flexible to cater for different national systems, while ensuring information is provided at the most relevant time for the potential and existing members, and beneficiaries. The omission of risk-based quantitative requirements raises concerns that members and beneficiaries of occupational pension schemes may not consistently benefit from the highest standards of protection.
Under Directive 2009/138/EC (“Solvency II”), which is due to apply from 1 January 2016, reinsurers seem no longer allowed to provide cover to Institutions for Occupational Retirement Provision (IORPs) directly. This potential development is unfortunate for reinsurers, IORPs and beneficiaries. IORPs can be exposed to a market and biometric risks. For instance, IORPs offering annuities may be exposed to sizeable longevity risks, for which it is essential that they get adequate coverage. Reinsurance, as a security mechanism for carriers of occupational pension schemes, has the capacity to add stability to the pension system by offering such coverage.
Insurance Europe therefore suggests making an amendment to ensure that IORPs that currently make use of reinsurance can continue using it as a security mechanism for the benefit of the members and beneficiaries.
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