The European Parliament’s Committee on Economic and Monetary Affairs (ECON) discussed on Wednesday 20 April the amendment of the Solvency II directive on the taking up and pursuit of the business of insurance and reinsurance.
“Solvency II has proved its worth, but we need things to be adjusted”, said rapporteur Markus Ferber (EPP, Germany) in his opening address. In this respect, he regretted the “conservative interpretation” of the directive to date. He wants insurance to become a long-term investment opportunity, particularly by means of life insurance. “We need to make sure that policyholders are protected, that the money can be used for retirement and that it can be represented as a long-term investment”, he explained.
He also wants to include sustainability rules, in order to take more account of climate risk. This is a wish shared by Eero Heinäluoma (S&D, Finland): “Climate change is the biggest risk, we need to push for a more sustainable agenda”. For French MEP Stéphanie Yon-Courtin (Renew Europe), “the European Commission’s proposal is indeed too timid when it comes to climate risk”. She agreed with the rapporteur’s approach, which corresponds “to the four priorities of Renew Europe”: freeing up funding capacity; adapting the frameworks to the current context; strengthening consumer protection; making the text more legible and operational.
The ECON Commission wants to strengthen cross-border supervision in order to make the European insurance market fairer. In general, the exchange of views was quite consensual. The report will be presented next week.
MEPs also discussed the directive that establishes a framework for the recovery and resolution of insurance and reinsurance undertakings (IRRD). It covers resolution in the event of bankruptcy, how to organise defaults on insurance payments, and how to organise financing to protect policyholders and taxpayers, as is already the case in banks. “We need to apply a different perspective than the banks”, emphasised Markus Ferber, who is also the rapporteur on this text. He criticised the European Commission for its “disproportionate” proposal, which still needs “a lot of work”.
Aurore Lalucq, (S&D, France) was in agreement. She wants to set up a resolution fund or subordinated debt to prepare insurance in the event of a crisis, especially in light of climate risk. (Original version in French by Anne Damiani)