Brussels, 26/02/2008 (Agence Europe) - On Tuesday 26 February, MEPs on the European Parliament economic and financial affairs committee held a third exchange of views on the draft Solvency II directive, which seeks to overhaul European solvency standards governing the activities of insurance and re-insurance companies, basing them on risk management (see EUROPE 9464 and 9465). Rapporteur Peter Skinner (PES, UK) presented a first working paper, before his draft report which is expected at the start of April. The European Commission representative said that the proposed amendment to the initial draft Solvency II, which affects only the section on the codification of existing directives, was due to be adopted on Tuesday.
Referring to studies carried out by reputable researchers, Margarita Starkevièiûtë (ALDE, Lithuania) said that the approach based on management of the risks related to insurance activities that the Commission was pursuing was “dangerous” insofar as it “encourages cyclical behaviour”. Without rejecting the approach, Ieke van den Burg (PES, Netherlands) was concerned that there was no link between Solvency II and the current credit crunch in financial markets. “The link will have to be made,” and the risks seen, she said. Sharing the same reservations as the two previous speakers, Robert Goebbels (PES, Luxembourg) noted that insurance was dominated by a few large groups, while there were numerous small companies. He did not want a directive that would lead to a wave of mergers and concentrations in the sector. Several MEPs, such as Alain Lipietz (Greens/EFA, France), highlighted the situation peculiar to friendly societies. Others, like Jean-Paul Gauzès (EPP-ED, France), asked whether pension funds were to be included in the scope of the future directive.
Monitoring group activities would surely be one of the key elements of the Solvency II legislative proposal. Skinner drew a distinction between the role to be played by the supervisory authority of the member state in which the insurance group is established, and that by the authority of the country in which a subsidiary of this group is established. Karsten Friedrich Hoppenstedt (EPP-ED, Germany) said that monitoring a company at group level would not put an end to a national authority's supervision. French Socialist MEP Pervenche Berès said that national supervisors had to be encouraged to cooperate more, particularly by means of such an encouragement in the national mandates assigned to national authorities. John Purvis (EPP-ED, UK) asked about regulation of insurance companies from third countries operating in the EU. He asked who would be the group supervisor if the group was established outside the EU. Should there have to be an EU headquarters, he wondered. Pointing out that its competence was limited to companies established in the EU, the Commission said that, for subsidiaries of insurance companies from third countries operating in the EU, it would have to give a ruling on the equivalence of systems in force in the third countries in question. (M.B.)