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Insurance Europe aisbl - Rue Montoyer 51 B-1000 Brussels - Belgium
  • Views shared on numerical haircut floors for SFTs

    Insurance Europe has responded to the Financial Stability Board’s (FSB) consultation on a proposed application of numerical haircut floors to transactions between non-bank entities, which include insurers, for securities financing transactions (SFTs).
     
    In its response, Insurance Europe agreed that the proposed measures will help reduce the risk of regulatory arbitrage. It also agreed with the report's conclusion that the value of non-bank to non-bank transactions is small, and would only pose risks if market practices were to change in the future or if regulatory arbitrage activities were to occur.
     
    While Insurance Europe supports the application of numerical haircut floors for transactions between non-bank entities where the potential for risk is present, it is also concerned that the implementation could result in excessive regulation.
     
    In particular, the following transactions should be exempted at the very least:
    -  Intra-group transactions
    - Transactions in which financing is received by regulated entities subject to regulatory capital and liquidity requirements such as insurance companies
     
    This is because, in Insurance Europe’s view, these transactions do not pose any significant risk.

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    17 Dec 2014
    Regulation & supervision
  • EC request for EFRAG endorsement advice on IFRS 9

    Commenting on the European Commission (EC)’s request to the European Financial Reporting Advisory Group (EFRAG) for endorsement advice on the International Financial Reporting Standards (IFRS) 9, Insurance Europe’s deputy director general, Olav Jones, said:
     
    “Insurance Europe welcomes the recognition of the needs of insurers in the EFRAG’s endorsement advice for IFRS 9, for Financial Instruments. There are, however, unresolved problems regarding the interaction of IFRS 9 and a new IFRS for insurance contracts, IFRS 4 Phase II, which the International Accounting Standards Board (IASB) is still developing. This means that Insurance Europe cannot support IFRS 9’s endorsement for mandatory use by insurers in Europe, until these problems are resolved in such a way that both IFRSs will work together.

    “Insurers follow long-term asset and liability management strategies, and need consistent accounting requirements for financial instruments and insurance liabilities to show their financial performance coherently and in line with their business model. The IASB’s project for insurance contract accounting has not yet produced appropriate proposals, especially for participating contracts.
     
    “As a result, insurers do not know how they will account for their liabilities. Nor will the resulting IFRS for insurance contracts be ready in time - the IASB has set its effective date for IFRS 9 as 2018, and yet insurers will need at least three years for implementation of the new IFRS for insurance contracts. This means insurers won’t be able to apply the two IFRSs together.
     
    “It is currently not possible for insurers to assess fully the possible unintended consequences of the application of IFRS 9 until IFRS 4 Phase II is successfully completed. If insurers are forced to use IFRS 9 too early, or in conjunction with an inappropriate IFRS for insurance contracts, their financial performance may be distorted in their accounts. This may be difficult to explain, and there is a significant risk that investors will be misled. This would lead insurers to use non-GAAP performance reporting, the opposite result which the IASB project is designed to achieve.”
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    16 Dec 2014
    Regulation & supervision
  • Response given to FSB critical functions consultation

    Insurance Europe has responded to a Financial Stability Board (FSB) consultation on the identification of critical functions and critical shared-services in the context of recovery and resolution planning for systemically important insurers.
     
    Insurance Europe supports the FSB’s encouragement of cross-border supervisory co-operation on resolution and its work to develop a common understanding of critical functions.
     
    But in its response, Insurance Europe also noted that critical functions should be identified exclusively according to their potential ability to materially affect the financial system and the real economy.

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    12 Dec 2014
    International affairs & reinsurance
  • EIOPA insurance stress test 2014

    Commenting on the results of the European Insurance and Occupational Pensions Authority (EIOPA) stress tests released today, Olav Jones, deputy director general at Insurance Europe, said:

    “Europe’s insurers welcome the results of the EIOPA stress tests, which clearly demonstrate the resilience of the European insurance industry ahead of the implementation of Solvency II in January 2016.

    “The stresses used were very severe and covered all the major risks that insurers take on to protect their policyholders. The fact that the insurers’ capital went down after these kinds of severe events is quite normal, and it is very encouraging to see that even after such severe events generally companies will still be able to meet their full solvency capital requirements.

    “As pointed out in the recommendations of this report, there is still work for both the industry and national supervisors to do in preparation. To that end, the industry continues to work hard with EIOPA and national supervisors to prepare for Solvency II implementation.”

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    30 Nov 2014
    Regulation & supervision
  • Save the date: 27 May 2015

    Insurance Europe's 7th International Insurance Conference, will be held on 27 May 2015 at the Luxembourg Congrès Conference Centre.

    The full-day conference is a great opportunity to hear from world-class speakers and network with around 400 delegates from over 40 different countries worldwide.

    Early bird registration will be opening in early 2015 and you can pre-register now.

    Take a look at our 6th International Insurance Conference event held in Malta here and there is also information available on sponsorship opportunites.

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    27 Nov 2014
  • IMD 2 must benefit policyholders and be workable for insurers

    The final revised text of the Insurance Mediation Directive (IMD 2) should result in a solution that both benefits policyholders and is not unnecessarily burdensome for the insurance industry, according to Insurance Europe.

    Following the Council of the European Union’s adoption of its general approach on IMD 2 last week, the Directive will now likely enter into trialogue discussions between the European institutions towards the end of this month.
     
    William Vidonja, Insurance Europe’s head of single market and social affairs commented: "The Council’s adoption of its general approach is a major step forward in the development of IMD 2. It is important for the trialogue discussions to result in a solution that is both workable for the industry and that offers protection to policyholders."
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    13 Nov 2014