The proposed merger of the European Union’s insurance and banking regulators in the wake of Brexit could damage the quality of financial supervision, the federation of European re/insurers has warned.
Insurance Europe is opposing ideas put forward in a European Commission consultation to combine the European Insurance and Occupational Pensions Authority with the European Banking Authority or transfer some of its powers to the European Securities and Markets Authority.
The federation said the merger or the transfer of regulatory powers would reduce the effectiveness of consumer protection and prudential oversight. Such moves would not lead to better EU-level supervision or increased convergence in the way national authorities supervise insurance, the federation added.
“We need a strong, dedicated European insurance supervisor. Insurance is a complex industry that requires a focused supervisor with a high degree of expertise overseeing all areas of supervision,” said Michaela Koller, director general of Insurance Europe.
“To split insurance responsibilities across ESAs or merge supervisors could put this expertise at risk, and would be a bad result,” Koller continued.
Insurance Europe added that there is also no evidence that another EU supervisory structure would work better and justify the costs, risks and years of uncertainty that accompany significant structural changes such as Solvency II and new regulation coming into force in the next few years.
“It is therefore too early and too risky to make structural changes,” the federation said.
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