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

    BCBS Amends Guidelines on Sound Management of AML/CFT Risks

    BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).

    July 02, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Amendments to Swap Margin Rule

    US Agencies (Farm Credit Administration, FDIC, FED, FHFA, and OCC) finalized changes to the swap margin rule to facilitate implementation of prudent risk management strategies at banks and other entities with significant swap activities.

    July 01, 2020 WebPage Regulatory News
    News

    PRA Letter Sets Expectations on Approach to Managing Climate Risks

    PRA published a letter that builds on the expectations set out in the supervisory statement (SS3/19) on enhancing banks' and insurers' approaches to managing the financial risks from climate change.

    July 01, 2020 WebPage Regulatory News
    News

    EBA Guidelines on Treatment of Structural Foreign Exchange Under CRR

    EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).

    July 01, 2020 WebPage Regulatory News
    News

    FSB Issues Statement on Impact of COVID-19 Crisis on Benchmark Reform

    FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.

    July 01, 2020 WebPage Regulatory News
    News

    IAIS Publishes List of Internationally Active Insurance Groups

    IAIS published the list of Internationally Active Insurance Groups (IAIGs) publicly disclosed by group-wide supervisors.

    July 01, 2020 WebPage Regulatory News
    News

    FED Temporarily Revises FR Y-9C With Respect to PPPLF and CARES Act

    FED has temporarily revised the reporting form on consolidated financial statements for holding companies (FR Y-9C; OMB No. 7100-0128).

    July 01, 2020 WebPage Regulatory News
    News

    EC Launches Consultation on Review of Solvency II Directive

    EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020.

    July 01, 2020 WebPage Regulatory News
    News

    ECB Consults on Supervisory Approach to Consolidation in Banking

    ECB launched a consultation on the guide that sets out supervisory approach to consolidation projects in the banking sector.

    July 01, 2020 WebPage Regulatory News
    News

    IAIS on Package for 2020 Data Collection on ICS and Aggregation Method

    IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.

    June 30, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5425