Insurance Europe, the federation of European insurance associations, has reached out to the European Commission to emphasize the significance of adhering to the established political consensus and European Union targets during the technical discussions of the Solvency II review.
The federation expressed its concerns in a letter addressed to EC vice president Dombrovski and Commissioner McGuinness. The correspondence was timed to coincide with the inaugural technical session by the EC’s expert group on banking, payments, and insurance scheduled for May 15.
The main worry of Insurance Europe is that deviations in the detailed negotiations from the agreed objectives could hinder the sector’s capability to support broader EU policy goals.
The industry is advocating for a steadfast commitment to the terms negotiated between the EU Parliament and Council, particularly regarding the volatility adjustment. This mechanism is critical for shielding insurers from undue financial market volatility.
“It is very important to get this, and other key calibrations, such as those relating to the extrapolation of the risk-free interest rates and risk margin, right,” Insurance Europe said in a release.
Further, Insurance Europe’s recent position paper, “Delivering on the agreed ambitions for the Solvency II review,” urges the European Commission to fulfil its commitment to slash the reporting burden by 25%. The federation argues that the current reporting requirements stifle innovation and investment.
In the 14-page paper, Insurance Europe stated: “If implemented appropriately, the changes can help insurers better serve customers, unlock more investment for the green and digital transitions, and support progress towards completing the EU’s Capital Markets Union, while maintaining the high level of policyholder protection of the framework.
“However, in order to realise the potential benefits, the technical details in Level 2 and 3 implementing regulation and guidelines need to be fully aligned with the high political ambition resulting from the Level 1 Directive review. While the upcoming Level 2 empowerments likely cover mostly technical details, they can have a significant impact, and getting them right is essential for the overall outcome of the review.”
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