Notably Omnibus II contains important provisions that should allow the insurance industry to continue offering long term guaranteed products (typically life insurance policies being paid out in a lump sum when the policy holder reaches a certain age or in the form of annuities). This kind of policy is an essential part of retirement planning for citizens in many Member States. Moreover, it will ensure that insurance companies in general and life assurance companies in particular can match these long-term liabilities with investments in long-term assets such as infrastructure projects.
The agreement also contains measures to alleviate the burden for small and medium-sized insurers in the area of reporting.
Finally, it confirms the powers of EIOPA which will now be able to ensure coherence of national supervisory practices and contribute to a single rule book on insurance supervision.
The European Parliament and the Council agreed that new rules of the Solvency II Directive (including the amendments introduced by Omnibus II) should apply as of 1 January 2016, in line with the Commission proposal of 2 October 2013 postponing the application date of Solvency II.
Press release
EP/Council deal on rules to reduce insurance firms’ investment risks
"It's a good deal for the EU and for insurers", said ECON chair Sharon Bowles, noting that the "calibrations" set out in last month's Member State package were kept. This gives insurers a far more generous shield against market swings when it comes to calculating capital levels, known as a volatility dampener, than the regulator had proposed.
The deal meets the concerns of influential countries such as Germany, Britain and France, which were crucial for an agreement. Efforts underway at the global level to agree on the world's first common insurance capital standard meant that failure by the EU to agree on Solvency II would have made it harder for the bloc to influence that process in a credible way.
Further reporting © Reuters
© European Commission
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