Agreement on Solvency II framework is reached

The CEA, the European insurance and reinsurance federation, has welcomed the news that informal but unanimous agreement has been reached at political level in Europe on the text of the proposed Solvency II Framework Directive after prolonged negotiations.

However the ABI said the final proposals were a "missed opportunity" because capital requirements will still be set in each country a firm operates in, rather than centrally by a lead regulator, as originally proposed.

Michaela Koller, CEA director general said: “This is a decisive step towards the new, enhanced regulatory regime that we have been seeking for Europe’s insurers.

“We are happy that the timetable for implementing the Directive is on track. Solvency 2 is an important and timely piece of legislation and any delay would have been most unfortunate in the current economic climate.”

The CEA said it felt that carving out group support from the text agreed means that Europe has missed the opportunity to introduce a tool that would have met the need for the efficient and effective supervision of multinational groups which was highlighted last month in the De Larosière Group’s report on financial supervision.

“The industry looks forward to Europe taking this step as soon as possible,” added Alberto Corinti, deputy director general of the CEA.

Stephen Haddrill, director general of the ABI, agreed. He said: "A directive with group support would have been world leading. This direct is not."

The text of the Framework Directive agreed informally today by the Committee of Permanent Representatives is expected to be formally endorsed next week.

The European Parliament will put the Directive to a plenary vote on 22 April. Formal adoption of the Framework Directive could then take place during the 5 May Economic and Financial Affairs (ECOFIN) Council.

“The CEA stands ready to continue contributing to the work on the Level Two implementing measures of the Directive, to ensure that the best possible framework for the supervision of Europe’s insurers is achieved,” concluded Corinti.