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Insurance Europe aisbl - Rue Montoyer 51 B-1000 Brussels - Belgium
  • Response provided to Commission consultation on securitisations

    Insurance Europe recently responded to a European Commission consultation on an EU framework for simple, transparent and standardised securitisation.
     
    In its response, Insurance Europe said it supports the use of good securitisations to help fund the European economy.
     
    It also indicated that enhanced standardisation, transparency and quality of securitisations will support insurers' access and interest in this asset class.
     
    While acknowledging that the development and compliance with such provisions could take time, Insurance Europe warned that this must not be used as an excuse to delay the immediate review of the current prudential treatment of securitisations  which, as it stands, is inappropriate.
     
    Insurance Europe said that, in the short-term, a number of improvements in the Solvency II approach for qualifying securitisations are needed.

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    19 May 2015
    Regulation & supervision
  • Response provided to the Capital Markets Union green paper

    Today, Insurance Europe published its response to the Commission’s consultation on Capital Markets Union (CMU). Insurance Europe welcomes the objectives of the CMU project: to unlock more investment for all Europe’s companies and infrastructure, to ensure that conditions are right for further foreign investment, and to open alternative sources of funding to ensure stable financial systems. 
     
    As Europe’s largest institutional investors, the (re)insurance sector welcomes the opportunity to contribute to this important debate and to share its views on how the above objectives could be reached. Details on Insurance Europe’s key considerations are available in its response to the consultation, which is available here.

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    13 May 2015
    Regulation & supervision
  • Concerns raised on OECD BEPS rules for controlled foreign companies

    Insurance Europe recently highlighted concerns regarding the Organisation for Economic Cooperation and Development’s (OECD) public discussion draft on base erosion and profit shifting (BEPS) action 3 on strengthening controlled foreign company (CFC) rules.
     
    Insurance Europe stressed that, even though an insurance income could be in a different territory than the risk insured, it does not mean that BEPS activity is taking place. Rather, this is merely a consequence of insurers managing risks on a global basis, including through reinsurance.
     
    It also said that the discussion draft lacks a clearly articulated policy objective, as it attempts to satisfy multiple competing objectives, resulting in a set of complicated and sometimes conflicting proposals.
     
    Concerns were also raised about how the CFC proposals could undermine the detailed work already done under other BEPS actions. As such, Insurance Europe suggested that the CFC rules should be developed to deal with BEPS issues, but that they should not go further than that.

    04 May 2015
    Regulation & supervision
  • Comments provided on IFRS 9 endorsement in the EU

    Insurance Europe and the CFO Forum have written to the European Financial Reporting Advisory Group (EFRAG) to express their views on the EFRAG's draft endorsement advice of the International Financial Reporting Standard (IFRS) 9 on financial instruments in the EU. The EFRAG provides technical support to the European Commission on financial reporting issues.
     
    The letter said that it is important that the accounting requirements for financial instruments and insurance contracts (IFRS 4 Phase II) are considered and applied simultaneously. It is also crucial that there is a global solution to align the effective dates for IFRS 4 Phase II and IFRS 9 for insurers, reflecting how insurers' financial assets and insurance liabilities are managed together.

    The letter also indicated that whilst the full impact of IFRS 9 on the insurance industry is yet to be determined, an initial review of the balance sheets of some of the largest and most affected continental European insurers suggests that between 8% and 20% of the assets currently accounted for at amortised cost or on an available-for-sale basis, with a value of more than €250bn, will be required to be accounted for at fair value through profit and loss. Fair value movements on these assets would be recognised in the income statement.

    With the measurement methodology for insurance liabilities remaining unaltered until the IFRS 4 Phase II standard is implemented, this will give rise to significant volatility in reported net income. For example, based on analysis by some of the larger continental European insurers for the years 2011 to 2014, there would have been volatility of up to 20 per cent from this accounting mismatch.

    The EFRAG Board will decide on the final draft endorsement advice on 22 April. Following the approval, there will be a public comment period during which Insurance Europe and the CFO Forum will submit comments. The final endorsement advice is expected to be decided in early July 2015, after which the EC can make a decision on whether IFRS 9 should be endorsed in the EU.

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    21 Apr 2015
    Regulation & supervision
  • EU and US insurers call for full inclusion of financial services in TTIP

    Insurance Europe, the American Insurance Association (AIA), and the American Council of Life Insurers (ACLI) have today published a joint statement reiterating their call for the inclusion of financial services in the Transatlantic Trade and Investment Partnership (TTIP) agreement.
     
    TTIP represents not only a unique opportunity to grow bilateral trade relationships, but also an opportunity to set the bar for future trade agreements, and to support regulatory cooperation.
     
    Strengthening this cooperative relationship could open potential markets for EU and US insurers and ensure a healthy global insurance industry.

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    16 Apr 2015
    International affairs & reinsurance