A new risk-based regime for Europe
As of 1 January 2016, Europe’s insurers are governed by a new set of rules called Solvency II. These rules aim to ensure that policyholders throughout the European Union enjoy the same level of protection, no matter where they buy insurance.
Europe’s insurers have played a significant role in the development of these new rules and welcome their aims. However, insurers remain concerned that certain elements within Solvency II will produce unintended consequences, which could ultimately harm both insurers and their policyholders.
For example, the new rules unnecessarily increase the cost of making long-term investments. This reduces insurers’ ability to make such investments, which are crucial for providing good returns to our policyholders, and which underpin economic growth and stability in Europe.
Through engagement with policymakers and supervisors, however, Insurance Europe is working to ensure that the rules are adjusted so that Solvency II works as planned and unintended consequences are avoided. It is hoped that some of these improvements will be included in actions related to the Capital Markets Union project, and that others as part of Solvency II's review processes.