Brussels, 29/03/2016 (Agence Europe) - The Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE) said on Tuesday 29 March that the new prudential regime, with the entry into force of Solvency II, increased dependency on credit rating associations and led to excessive costs for insurers. This question “should be re-examined when Solvency II is revised in 2008”, the president of AMICE, Hilde Vernaillen, states.
In the framework of the new prudential regime, the information provided by ratings agencies is needed to calculate the solvency capital required (standard form) and to report to the national competent authorities and EIOPA, the European supervisor, AMICE explains. The standard form uses the ratings of these agencies as the main indicators to assess market risks, such that if an insurer invests in unlisted assets or has no information on the assets, the capital requirement will be very high. Insurers can create their own model to avoid these requirements, but it is expensive and time-consuming to develop an internal model of this kind.
With the entry into force of Solvency II, the credit ratings agencies have decided to pass on to the market players the additional costs for the use of the information regarding the ratings in their reports to the national competent authorities. The result is that insurers have to pay for the same information several times, AMICE regrets. (Original version in French by Elodie Lamer)