Insurers reject Ceiops’ rules

Proposed changes to the EU’s Solvency II directive contain macro-economic risks, European insurers have warned in a heavyweight new report.

The study by CEA, the European insurance and reinsurance federation, says the proposals for implementing changes to the capital requirements framework directive by Ceiops (the Committee of European Insurance and Occupational Pensions Supervisors) are “overly prudent”.

It says they would not only restrict the insurance industry’s role as a risk-absorber but also as an institutional investor financing long-term economic growth.

Over-capitalisation would affect the competitiveness of the EU insurance sector and its ability to attract new funding, putting it at a disadvantage in the global market, the report concludes.

Serious concerns

Tommy Persson, CEA president, said: “The insurance industry has serious concerns about the effect of some of the current proposals, as they would be bad for consumers, bad for Europe’s economy and bad for the insurance industry.”

“The reduction in investment and underwriting capacity would have worrying downsides at macro-economic level.”

“We believe there is still time to get Solvency II right, and our report is intended to facilitate constructive debate on the detail of Solvency II with Ceiops and the European Commission within the framework set by the Council and the European Parliament”

Bad for consumers

“The insurance industry has serious concerns about the effect of some of the current proposals, as they would be bad for consumers, bad for Europe’s economy and bad for the insurance industry.”

The CEA calls on both CIEOPs and the European Commission, when drawing up the final measures for implementing the directive, to strike a balance between protecting the consumer through capital requirements and ensuring a wide choice of competitively priced insurance products.