|
|
Jonathan Faull, director general for Internal Market and Services, sent the letter last week to Gabriel Bernadino, chair of the European Insurance and Occupational Pensions Authority.
He writes: "While it is true that Solvency II had been conceived in very different economic circumstances from those we experienced in recent years, I assume that the Framework Directive adopted in 2009 is sufficiently flexible to allow insurers to adapt to the current state of the economy".
He goes on to request EIOPA to examine the calibration of capital requirements "under current economic conditions". EIOPA is being asked to coordinate with the European Banking Authority and the European Securities and Markets Authority, and to give the Commission feedback before February 2013.
The Association for Financial Markets in Europe (AFME) welcomed the move, which follows a long campaign by AFME to highlight poor calibration of capital charges for securitisation. Whole loans, for instance, attract much lower capital charges than senior tranches of securitisations of the same loans.