Brussels, 28/01/2008 (Agence Europe) - At a public hearing on the draft directive “Solvability II” on Monday 28 January, Gérard de La Martinière, President of the European Insurance Committee (CEA), announced that the CEA had written last week to Commissioner McCreevy, who is in charge of Internal Market issues, to alert him to the methodology recommended by the industry to calculate capital requirements for insurance companies. The “unanimous” position of the insurance companies, he told EUROPE, is that the methodology used to calculate minimum capital requirements (MCR) and solvency capital requirements (SCR) should reflect the actual risk profile of the insurance company. “Any other approach may create serious distortions” of the methods used by the insurers. What is at stake for the insurers is to minimise the portion of their capital which must be mobilised in order to prevent risks of bankruptcy.
This is a “political issue” which is closely linked to the question of the supervision of the groups of insurers, said Thomas Steffen, President of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). He believes that “the right grading and the right design” for capital requirements have yet to be found. This is why CEIOPS has proposed that another technique, the “linear approach”, be tested to calculate the MCRs. This is the only way, according to the national supervisors, to have a complete view of the possibilities before the political decision-makers make their decision.
The question of the MCRs will be tackled in the application measures of the directive “Solvability II”, which will be the subject of a specific impact study (QIS4) in 2008, in parallel with negotiations underway at the Council and the European Parliament on the framework directive. The Slovenian Presidency has made this legislative proposal one of its priorities in the field of financial services. Peter Skinner (PES, UK), rapporteur on this dossier, voiced his hopes that the EP would be able to vote on this matter at first reading before July. (M.B.)