“The EPP Group in the European Parliament wants European insurances to be safe and stable and contribute to financing the Green Deal and the digital transformation”, explained Markus Ferber MEP, EPP Group Spokesman on Economic Affairs, ahead of the presentation by the European Commission of its update of the Solvency II Regulation. This framework requires insurance companies like Generali, Allianz or AXA to hold capital in relation to their risk profiles to guarantee that they have enough financial resources to withstand financial difficulties.
“Solvency II is the world’s gold standard for insurance regulation. What we need with the review is a gentle evolution, not a revolution. Getting the calibrations for capital requirements and risk provisioning right, is key. Otherwise, even the healthiest insurance companies will struggle.”
“If we get Solvency II right, we can turn insurance companies into long-term investors that help us finance the Green Deal and the digital transformation. Due to their long-time horizons, insurance companies make for perfect long-term investors. We need to make better use of that potential to support the recovery”. However, explained Ferber: “A dedicated prudential treatment for supposedly green activities is not the way forward though. Prudential supervision has to focus on risk alone. Otherwise, financial stability and clients will lose out in the end.”
The Solvency II review needs to introduce more proportionality into insurance supervision. “Financial supervision needs fewer one-size-fits-all solutions and more risk-based supervision. We have already introduced a more risk-based approach for banks and investment firms, now it’s high time to introduce a similar regime for insurance companies. The Commission proposals on proportionality are a step in the right direction”, Ferber concluded.
The EPP Group is the largest political group in the European Parliament with 179 Members from all EU Member States