Europe's insurance industry has expressed some disappointment at the position adopted by the European Parliament's Committee of Economic and Monetary Affairs on the Solvency II review today.
Commenting on the vote today, Olav Jones, Deputy Director General from Insurance Europe, said, “It is overall an improvement on the initial European Commission proposal and Council of the EU text in areas such as capital, volatility and proportionality. However, it is disappointing that some of the original ambitious proposals have been watered down. This is a missed opportunity to allow the insurance industry to deliver even more for consumers and invest even more in Europe. Private investment is vital for Europe to meet its green and digital transformation goals. The trilogues between the three main EU institutions can now begin. A key objective of the review is for insurers to invest more in long-term capital for the economy. The European Commission has also recently committed to simplifying and reducing reporting obligations by 25%. We call for these ambitions to be reflected in the trilogue negotiations and the final text.”
Insurance Europe — the federation of national insurance associations — had welcomed the review of Solvency II which seeks to reinforce an EU framework which protects policyholders so that it can also increase the industry's contribution to a green recovery. A key element of this was to address concerns about measurement flaws which result in excessive capital requirements and high volatility. These create unnecessary barriers for insurers to offer the long-term products, guarantees and investments customers need. They also limit insurers' capacity to invest and undermine European insurers’ global competitiveness. The insurance industry further highlighted the need for the review to get the key principle of proportionality working in practice and to avoid disproportionate costs which ultimately fall on customers.