Strasbourg, 05/07/2006 (Agence Europe) - On 4 July the European Parliament adopted an interim report from the Committee of Inquiry into the collapse of the British insurance company Equitable Life and the malfunctioning of European legislation, which proved incapable of preventing such a collapse. This report “demands” that governments, parliaments, monitoring and regulation authorities, particularly in the “United Kingdom, Ireland and Germany” help the committee of inquiry in its work. The EP calls on this committee to continue its work and extend its mandate till April 2007.
British Liberal Democrat Diana Wallis, rapporteur for the Committee of Inquiry declared in a press release that, “The challenge now for the European Parliament is to exercise our supervisory powers over EU legislation…One of the main themes of the debate was the way the various national regulators have played ping pong with the victims”. She added that the victims' experiences had made her angry, “angry that they have been let down by their experience of our internal market for financial services”, which caused them to lose their savings, “with no redress mechanisms available”. Ms Wallis summed up a note from the Commission, which has acknowledged poor application of European legislation in the domain of insurance. In its note the Commission indicates, “The directive can only work smoothly if there is good cooperation between home and host state authorities. It is not a satisfactory situation, where aggrieved policyholders are referred by the host state authorities to the home state authority and are then sent back by the home to the host authority, thus to find themselves unable to have their case examined by either. The Commission plans to seek further discussions with Member States”.
The EP considers that the questions examined “could present a general interest for the 'Solvability 2' project, particularly in the case of possible future provisions on rules on insurance companies' assets and liabilities and re-insurance”. In July 2007, the Commission will launch a draft “Solvability 2” directive, which for the insurance sector is the equivalent of the “Basel 2” directive for the banking sector (EUROPE 9219). More than a million European citizens who owned insurance polices in the Equitable Life company, including 15,000 non-residents in the United Kingdom, lost sums that in total were above € 5 bn.