Solvency II

Insurance industry calls on European Commission to deliver Solvency II deal


Insurance Europe has written to the European Commission highlighting the importance that technical negotiations of the EU’s Solvency II review stay aligned with the political agreement and EU goals on climate change, financing the green and digital transitions, the Capital Markets Union and increasing competitiveness.

It warns that if the Level 2 technical negotiations – which set out the details on how the prudential regime should be implemented – veer away from the aims of that agreement, it will undermine the industry’s ability to contribute to the wider EU policy objectives.

The letter was sent to the European Commission’s (EC) Vice-President Dombrovski and Commissioner McGuinness, just before the EC’s Expert Group on Banking, Payments and Insurance hold the first set of technical talks on 15 May. Insurance Europe – the federation of insurance associations – is concerned because these details will play a crucial role in determining the impact and benefits of the review.

For example, the industry notes that there should be no backpedalling on the agreement reached between the EU Parliament and Council to limit the impact the impact of changes to the risk correction - a key element of the Volatility Adjustment which protects insurers against unnecessary volatility from financial markets. It is very important to get this, and other key calibrations, such as those relating to the extrapolation of the risk-free interest rates and risk margin, right.

Referring to its recently published position paper, ''Delivering on the agreed ambitions for the Solvency II review'', Insurance Europe also called on the European Commission to also ensure that it uses the negotiations to deliver on its promises to reduce the reporting burden by 25%, which is holding back innovation and investment.