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

    MAS Amends Notice 610 on Reporting Templates for Banks in Singapore

    MAS published amendments to Notices 610 and 1003 related to submission of statistics and returns, along with the reporting templates and frequently asked questions (FAQs) associated with these Notices.

    January 24, 2020 WebPage Regulatory News
    News

    HKMA Updates Policy Module on Supervisory Review Process

    HKMA is issuing, by notice in the Gazette, revised versions of two Supervisory Policy Manual modules as statutory guidelines under section 7(3) of the Banking Ordinance. The Supervisory Policy Manual modules are CA-G-5 on “Supervisory Review Process” and SB-2 on “Leveraged Foreign Exchange Trading.”

    January 24, 2020 WebPage Regulatory News
    News

    PRA Amends Pillar 2 Capital Framework for Banks

    PRA published the policy statement PS2/20 that contains the final amendments to the Pillar 2 framework and provides feedback to responses to the consultation paper CP5/19 on updates related to Pillar 2 capital framework.

    January 23, 2020 WebPage Regulatory News
    News

    FED Proposes to Revise Information Collection Under Market Risk Rule

    FED proposed to revise and extend, for three years, FR 4201, which is the information collection under the market risk capital rule.

    January 22, 2020 WebPage Regulatory News
    News

    HKMA Consults on Stay Rules on Financial Contracts Under FIRO

    HKMA published proposals for making rules related to contractual stays on termination rights in financial contracts for authorized institutions under FIRO or the Financial Institutions (Resolution) Ordinance (Cap. 628).

    January 22, 2020 WebPage Regulatory News
    News

    MAS Amends Notices on Minimum Liquid Asset Requirements for Banks

    MAS published amendments to Notices 1015, 613, and 649 related to the minimum liquid assets (MLA) requirements.

    January 21, 2020 WebPage Regulatory News
    News

    APRA Publishes Submission on Fintech and Regtech

    APRA published its submission, to the Senate Select Committee, on financial technology and regulatory technology.

    January 21, 2020 WebPage Regulatory News
    News

    OSFI to Implement Operational Risk Capital Rules for Banks in Q1 2022

    OSFI decided to move domestic implementation of the revised Basel III operational risk capital requirements from the first quarter of 2021 to the first quarter of 2022.

    January 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guideline on Threshold for Credit Obligations Past Due

    ECB published a draft guideline, along with the frequently asked questions (FAQs), on the definition of the materiality threshold for credit obligations past due for less significant institutions.

    January 20, 2020 WebPage Regulatory News
    News

    OSFI Consults on Instruction Guide for Termination of Pension Plan

    OSFI is consulting on draft revisions to the instruction guide for termination of a defined benefit pension plan.

    January 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4526