The Commission started a consultation on the harmonisation of solvency rules applicable to IORPs to collect the views whether a further harmonisation of the solvency regime for IORPs is desirable.
The Commission started a consultation on the harmonisation of solvency rules applicable to IORPs covered by article 17 of the IORP Directive and IORPs operating on a cross-border basis.
The focus of this consultation is on IORPs subject to Article 17 because they underwrite liabilities to cover against biometric risks, or provide guarantees of a given investment performance or a given level of benefits.
Main drivers determining the scope of the consultative document are risk-based supervision, Solvency II for life assurance undertakings and differences in national solvency rules for IORPs, the Commission states.
During the preparation of the Solvency II proposal, it was decided to “carve out” IORPs from the scope of Solvency II because of a lack of solid evidence about the potential implications. Moreover, further work was required to determine whether or not the new solvency regime developed for insurance undertakings would be suitable for IORPs subject to Article 17.
Beyond IORPs subject to Article 17, the only other area within the scope of this consultation is IORPs that undertake cross-border activity. This is a crucial part of the consultation because of the need to ascertain whether different approaches to IORPs operating on a cross-border basis have given rise to regulatory arbitrage which can be shown to have harmed the interests of pension beneficiaries.
The purpose of this consultation is to collect the views from all stakeholders concerned whether they believe that, from an internal market perspective, a further harmonisation of the solvency regime for IORPs covered by Article 17 of the IORP Directive and IORPs operating on a cross-border basis is desirable or not and what the reasons are for expressing that view. The consultation intends to review neither the scope of the IORP Directive as a whole, nor the scope of Article 17 which determines that an IORP should only be required to hold regulatory own funds in cases where the IORP itself underwrites liabilities and/or guarantees a given investment performance or level of benefits.
Deadline for consultation is 28 November 2008.
Consultation document
Further information
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