EU revamps insurance regulation
The European Union will have its first big overhaul of insurance regulation in 30 years when a common framework is unveiled this week.
“Solvency II” will install a group supervisor to oversee risk control procedures and the financial strength of companies, and national regulators will retain some power at a local level.
Implementation of the new regime is expected to cost at least €2 billion ($3.17 billion). The European Insurance and Reinsurance Foundation (CEA) says the changes are necessary to deepen integration of the insurance market, improve policyholder protection, improve competitiveness for insurers and promote better regulation.
The changes will also allow most insurers to release more capital as regulations requiring maximum provisioning for claims are relaxed. Premiums could also fall once the changes are integrated.
The CEA says most insurers should have no problem complying with Solvency II, with more than 80% updating their framework to risk-based models.
“Solvency II will encompass every aspect of insurance operations,” it said in its June assessment of the new regime.
“Beyond imposing quantitative solvency requirements looking at insurance risks, [it] considers the overall management of risks and the structure of insurance supervision.
“Solvency II” will install a group supervisor to oversee risk control procedures and the financial strength of companies, and national regulators will retain some power at a local level.
Implementation of the new regime is expected to cost at least €2 billion ($3.17 billion). The European Insurance and Reinsurance Foundation (CEA) says the changes are necessary to deepen integration of the insurance market, improve policyholder protection, improve competitiveness for insurers and promote better regulation.
The changes will also allow most insurers to release more capital as regulations requiring maximum provisioning for claims are relaxed. Premiums could also fall once the changes are integrated.
The CEA says most insurers should have no problem complying with Solvency II, with more than 80% updating their framework to risk-based models.
“Solvency II will encompass every aspect of insurance operations,” it said in its June assessment of the new regime.
“Beyond imposing quantitative solvency requirements looking at insurance risks, [it] considers the overall management of risks and the structure of insurance supervision.