CEA comments on CEIOPS consultation on subordinated debt

09 February 2006

The CEA issued its comments to the consultation on subordinated debt and other hybrid capital and considers that the current classification between capital on one hand and subordinated debt on the other hand has been blurred by increasing use of hybrid capital. CEA therefore supports a new regulation adaptation as this will ensure a level playing field between insurance groups within the European market.

CEA also states that yet no existing insurance directives take into account hybrid capital instruments. The Committee therefore favours initiatives to keep the regulatory regime up-to-date with an adaptation of insurance directives to better take into account hybrid capital for the constitution of solvency margin and thus reconcile regulatory and economic logics.

This adaptation is also necessary to allow the insurance companies to take full advantage of the evolution of financial instruments, without waiting Solvency II implementation.

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