Featured Product

    EC Vice President Speaks About Solvency II and Capital Markets Union

    March 27, 2018

    The EC Vice President Valdis Dombrovskis spoke at the public hearing on the Solvency II delegated act. He focused on the work of EC toward building the Capital Markets Union and discussed the ongoing review of Solvency II and developments in the area of sustainable finance.

    The EC Vice President mentioned that the insurance sector in Europe supports the economy as one of the largest investors in economic growth, with more than EUR 10 trillion in assets. Thus, the sector is important for the ongoing work to build the Capital Markets Union. He mentioned new rules have been adopted to promote a safe and deep market for simple, transparent, and standardized securitization (STS). If these markets were built up again to the pre-crisis average, it would generate upto EUR 150 billion in additional funding for the economy. EC aims to further amend capital requirements in Solvency II to take into account the new legal framework for high-quality securitization. These revisions shall apply at the same time as the STS regulation in January 2019. He further added that despite steady progress, the Capital Markets Union is still far from complete. Out of the 12 legislative proposals on the Capital Markets Union, only three have been adopted. This is all the more urgent because the preconditions for a true single market for capital need to be in place by the time Brexit happens.

    Mr. Dombrovskis explained that to complete the Capital Markets Union by 2019, a strategy will be followed for major work along three dimensions: the EU single market, clear and proportionate rules, and efficient supervision. First, consumers and investors should benefit fully from the single market thanks to the new EU-wide financial products. For example, a Pan-European personal pensions product (PEPP) was proposed, which will be a voluntary and portable product complementing existing pensions. This product would have the same standard features wherever it is sold in the EU and a broad range of providers would be able to offer them, including insurance companies. Second, barriers should be removed to deeper capital markets through clearer and simpler rules for businesses. The third dimension is about achieving a more consistent supervision of EU capital markets, to protect investors and financial stability. ESAs are doing important work to implement the EU legislation and supervise financial markets. 

    He also discussed Solvency II, this year’s review of the delegated act, and targeted improvements. "First, we wants to help insurers invest in growth creation. In particular, high quality private equity and privately placed debt should benefit from the same capital treatment as listed equity or investment grade corporate bonds. Second, we will consider how proportionality under Solvency II can be improved, to minimize the reporting burden as much as possible... .Finally, we want to remove inconsistencies that have been identified in the implementing rules... ." Many insurance companies are concerned about the impact that Solvency II may have on their long-term business and EC takes this concern seriously. On this, "we are open-minded" and it goes without saying that any major reform would need to be well-justified. This topic will be for the review on this directive (Solvency II) in 2020. He also talked about the recently published Action Plan for sustainable finance and how it is relevant for the insurance sector. He concluded that "Fundamentally, Solvency II is about maintaining financial stability and protecting consumers. That is why it matters that we keep it up-to-date, with targeted adjustments if necessary."

     

    Related Link: Speech

    Keywords: Europe, EU, Insurance, Solvency II, Capital Markets Union, Sustainable Finance, PEPP, EC

    Featured Experts
    Related Articles
    News

    APRA Announces Deferral of Capital Reform Implementation

    APRA announced that it is deferring the scheduled implementation of Basel III reforms in Australia by one year.

    March 30, 2020 WebPage Regulatory News
    News

    IFRS Publishes Statement on Its Work During the COVID-19 Crisis

    IFRS, in its statement, emphasized that it shares global concerns about the impact of COVID–19 and is supporting its stakeholders by reconsidering timelines of its meetings and publications, providing information on the application of IFRS 9 on financial instruments, and offering calendar updates on ongoing activities.

    March 27, 2020 WebPage Regulatory News
    News

    US Agencies Announce Changes to SA-CCR and CECL Rules Due to COVID-19

    In light of the recent disruptions in economic conditions due to the COVID-19 outbreak, US Agencies (FDIC, FED, and OCC) announced two actions to allow banking organizations to continue lending to households and businesses.

    March 27, 2020 WebPage Regulatory News
    News

    IAIS Adjusts Work Program to Address Impact of COVID-19 on Insurers

    Considering the impact of COVID-19 outbreak, IAIS announced initial adjustments to its work program to provide operational relief to its member supervisors, insurers, and other stakeholders.

    March 27, 2020 WebPage Regulatory News
    News

    OSFI Announces Regulatory Adjustments to Support COVID-19 Efforts

    OSFI published three targeted industry letters that announce a series of regulatory adjustments to support the financial and operational resilience of federally regulated banks, insurers, and private pension plans in the light of COVID-19.

    March 27, 2020 WebPage Regulatory News
    News

    UK Regulators Announce Measures to Address Impact of COVID-19

    UK Regulatory Authorities published statements and guidance addressed to financial entities on dealing with the impact of the coronavirus (COVID-19) outbreak.

    March 26, 2020 WebPage Regulatory News
    News

    ISDA and Industry Request Delay in Timeline for Initial Margin Rules

    Considering the challenges posed by the COVID-19 pandemic, ISDA submitted a letter on behalf of 21 industry associations and their members requesting BCBS, IOSCO, and global regulators to suspend the current timeline for the initial margin phase-in.

    March 26, 2020 WebPage Regulatory News
    News

    FCA, FRC, and PRA Issue Joint Statement to Address Impact of COVID-19

    In response to the COVID-19 outbreak, FCA, the Financial Reporting Council (FRC), and PRA have announced a series of actions and made statements to support the continued functioning of capital markets in the UK.

    March 26, 2020 WebPage Regulatory News
    News

    EC Rule Corrects Regulation Supplementing Solvency II Directive

    EC published the EU Delegated Regulation 2020/442, which corrects the EU Delegated Regulation 2015/35 that supplements Solvency II Directive (2009/138/EC).

    March 26, 2020 WebPage Regulatory News
    News

    FED and FFIEC Offer Reporting Relief to Institutions Due to COVID-19

    FED and FFIEC announced regulatory reporting relief to financial institutions due to disruptions caused by the COVID-19.

    March 26, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4900