23 November 2016

Insurance Europe response to European Commission communication on its call for evidence: More ambition required to boost EU economic growth

Following the publication of the European Commission communication on the call for evidence on the EU regulatory framework for financial services, Michaela Koller, director general of Insurance Europe, issued a response.

Michaela Koller said:

“The European Commission’s goal of the Capital Markets Union is to boost economic growth in Europe. The call for evidence exercise was an effective way for the Commission to identify a range of regulatory issues that risk damaging the efficiency and growth of the European economy. Addressing the prudential treatment of infrastructure, private equity and private debt in Solvency II is certainly a welcome step in the right direction, although there is no clarity on timing.

 “However, since these assets represent only a small percentage of insurers’ portfolios, more needs to be done to achieve the ambitious goals that the Commission has set itself. In particular, capital requirements for the vast majority of insurers’ long-term investments are too high compared to the true risks they pose, but are currently not covered in the follow-up actions.

 “Unfortunately, these capital requirements unnecessarily disincentivise insurers from making the long-term investment that Europe so badly needs to boost growth and our customers need for reasonable pensions. Insurers are therefore calling for a wider scope of changes to cover all long-term investments, including equity. The Commission should also begin work on addressing the artificial volatility created by Solvency II’s measurement approach, to ensure the directive’s 2020 deadline for tackling this complex, but important, issue can be met.

 “Regarding conduct of business rules, Insurance Europe is disappointed that the Commission has not explained how it intends to make regulation future proof and address overloading and duplicatory information requirements that will result from the combined application of several EU consumer protection rules. To be clear: this is not an industry request to scrap information requirements; insurers are merely asking that inconsistency and duplication are addressed. Likewise, the industry is asking that rules that oblige it to use paper as a default option are revised, because insurers need legislation that is both digital and future proof to service their customers and remain competitive.”

Pres release

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