Insurers welcome adoption of amendments to Solvency II by the European Parliament
After four years, the Solvency II review process has come to a provisional end. Insurers can work well with the result.
The German insurance industry welcomes the finalisation of the Solvency II review. "The result is a balanced further development of the existing legal framework that insurers can work with well," says Jörg Asmussen, Chief Executive Officer of the German Insurance Association (GDV).
Regarding the regulatory framework for the insurance sector, Asmussen continues: "All insurers in Germany meet the solvency requirements without exception. They are in a position to meet their liabilities at all times. This is already the case under the existing requirements and will remain so in the future."
Following the political conclusion of the review, the focus will now be on delegated measures and national implementation. "The new rules leave room for interpretation. When implementing the Directive, care should be taken to ensure that as many small companies as possible have access to certain simplifications, for example in reporting," says Asmussen.
Regarding the new sustainability requirements, the CEO of the GDV explains: "The aim of Solvency II is to protect policyholders. It is therefore right that the new rules focus on the risks arising for insurers from the transition and climate change."
New recovery and resolution framework for insurers also adopted
With the IRRD, the European Parliament has also finalised rules for the recovery and resolution of insurance companies in the EU. The IRRD complements the existing regulatory framework. In future, national supervisory authorities such as the BaFin in Germany will have to ensure that a minimum number of insurance companies in each EU Member State are obliged to draw up pre-emptive recovery plans. Insurance companies are obliged to provide the necessary information.
"When implementing the Directive, duplicate reporting of information already collected by BaFin as part of ongoing supervision must be avoided under all circumstances. This would only increase the burden on companies and not create any added value," says Asmussen. From the insurers' point of view, this aspect must be given particular attention when implementing the Directive at national level.
Following the adoption of the Directives by the European Parliament and the Council of the European Union, the Member States, including Germany, have two years to transpose the provisions into national law.
