The European Commission published a proposal for a Directive on reinsurance. The proposed Directive would establish supervision of reinsurers by competent authorities in their 'home' country, on the basis of which they could operate throughout the EU. That supervision would have to be exercised in line with provisions which all Member States would need to apply.
The proposal would extend to reinsurance companies the system for the authorisation and financial supervision of an insurance undertaking by the Member State in which it has its head office ('home country control').
In order to implement such 'home country control' the proposed Directive would also set out essential provisions for the supervision of reinsurance, which all Member States would need to apply. The proposal lays down a licensing regime for reinsurance undertakings and conditions that reinsurers would have to meet before a license could be granted.
The proposal also sets out prudential rules for the supervision of reinsurance undertakings. It includes rules on the establishment of technical provisions and rules on the investment of assets covering those technical provisions. It also lays down rules on required solvency margins and minimum capital requirements as wells as rules on measures to be adopted by regulators if reinsurance undertakings are in financial difficulties. These prudential rules are similar to those already applied in the Insurance Directives.
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