Brussels, 02/04/2008 (Agence Europe) - British Labour Party member Peter Skinner, the rapporteur on the draft “Solvency II” directive which aims to give the European insurance industry more risk-based solvency standards (see EUROPE 9465 and 9464), presented his draft report to the European Parliament's committee on economic and monetary affairs on Tuesday 1 April. In general terms he supports the Commission proposal, which will enable better protection against the possibility of an insurance company going bankrupt by basing the rules on an economic evaluation of the risks in the industry. The amendments to the Commission's initial proposal advocated in the report mainly concern consumer protection, calculating the minimum capital requirement (MCR) and supervision of insurance groups. The vote in the Parliamentary committee is scheduled for June, and it is hoped that the EP could adopt the opinion in autumn 2008.
Mr Skinner believes that consumers should not be excluded from the legislation governing financial services, while also recognising that a piecemeal approach is not appropriate. “The best thing would be for the European Commission to make a proposal to improve the existing consumer protection rights horizontally”, he says in his draft report. In his view, “the 'compact' approach would be the most appropriate method” to ensure that demands in terms of capital are sensible, provide a sufficient safety net and are in proper relation to the solvency capital requirement (SCR). The 'compact' approach defines the MCR and as percentage of the SCR. Mr Skinner appreciates the simplicity of this approach, but concedes that it does not allow the MCR to be calculated independently of the SCR. On the supervision of insurance groups with cross-border activities, the rapporteur suggests that the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) advise in case of conflicts opposing the control authority which supervises activities at group level and the national regulator which controls a branch of the group established in another Member State. Mr Skinner also proposes that the concept of surplus be defined in the directive and that the provisions concerning the equivalence of solvency schemes in third countries where insurance companies active in the EU have activities be clarified. (M.B.)