Brussels, 23/03/2012 (Agence Europe) - Controversy is brewing at the European Parliament about the solvency ratios to be introduced for insurance companies. Adopting a draft report by Burkhard Balz (EPP, Germany) on the Omnibus II directive that fleshes out various measures from the Solvency II directive, MEPs on the EP's economic and monetary affairs committee reinstated measures, like a contra-cyclical premium and a matching premium that reduce the volatility of solvency ratios for insurance companies depending on changes in their capital, lessening the amount of required capital. Criticising a genuine festival of lobbying, Sven Giegold (Greens/EFA,Germany) said that insurance companies will get a total refund of €100 billion under these changes, most of which would go to British, Spanish, French, Italian and Germany insurance companies. He explained in a press release: “The European Parliament failed to overcome regulatory capture by divergent national business interests and to develop a truly European crisis response for the insurance industry.”
“We have now put in place a package of individual measures to better handle artificial market volatilities and to tackle pro-cyclicality. A recent impact study by the European Commission has suggested that the Solvency II provisions for long-term liabilities of insurance companies are not properly reflected. We need a European solution, but peculiarities of the national insurance markets have also got to be taken into account”, said Burkhard Balz (EPP, Germany).
The adopted report, which the EP will now be negotiating with the Council of Ministers, does not completely satisfy European insurance companies. Lobby group Insurance Europe, for example, said it was disappointed that despite some progress, the draft Balz Report included measures that would prevent the added measures from operating as expected. “Such a situation could lead to unnecessary increases in the costs of complementary pensions and other retirement savings products for consumers and could drive the European insurance industry to move away from long-term guarantee products as a result of regulation”, warned Insurance Europe's director general, Michaela Koller. (MB/transl.fl)