Assurance : les autorités de surveillance évaluent les risques de "Solvabilité II"[en] 

In July 2007, Internal Market Commissioner Charliee McCreevy launched a fundamental overhaul of the EU insurance and reinsurance sectors. The proposed 'Solvency II' directive aims to modify the delicate rules that prevent insurers from going bankrupt. 

According to the plans, the current flat-rate system is to be replaced by an economic risk-based assessment method. Insurance companies will not be forced to put aside a share of their capital in order to cover clients' requests. The new requirements will allow them to keep the minimum amount considered sufficient to cover the risks undertaken. Complex calculations will establish companies' exposure to market, credit and operational risks (see EurActiv 10/07/07).

The insurance sector in Europe employs over a million people. 'Solvency II' is supposed to replace the current Solvency Directive, which dates from the 1990s. Thousands of insurance companies across Europe will be concerned by the reform.

The new risk-based system introduced by 'Solvency II' presents a concrete advantage for companies that can dispose of higher amounts of money to invest and compete in an increasingly globalised market. One of the predicted consequences of the new rules is a merger and acquisition boom in the sector.

The Commission aruges that a more dynamic insurance market will make European companies more robust and more capable of facing difficult periods, bringing clear advantages for customers.

However, supervisors fear that increased dynamism could also bring about higher competition and thereby cause more bankruptcies as an unwanted consequence. "We realise that a risk-free system does not exist," acknowledged Mick McAteer of CEIOPS , the Committee of European Insurance and Occupational Pensions Supervisors. 

"However, in a system based on the principle that one company out of 200 will go bust every year, we have to underline that even only one bankruptcy affects consumers' confidence," he said during a conference in Brussels organised by CEA, the European insurance and reinsurance federation.

Internal Market Commissioner Charliee McCreevy reiterated that the proposed directive is based on "the best approach" and that it should remain unchanged. In a speech at the CEA conference, he also underlined the "fundamental differences between banking and insurance" made evident by the recent financial turmoil, which affected banks but not insurers.

The Commission's flexible approach towards the solvency of insurers is accompanied by a tougher line towards debtors. Yesterday, Commission Vice-President Franco Frattini, who is responsible for Justice and Home Affairs, launched an EU-wide consultation aimed at increasing the transparency of debtors' assets, mainly in relation to cross-border debt recovery.

Internal Market Commissioner Charliee McCreevy  again defended the set up of 'Solvency II': "The economic risk-based approach was shown to be the best one. If we make substantial amendments to the Proposal, we will lose some of the expected benefits of the measures". The Commission's proposal "should not be compromised and must enter into force as planned in 2012," he added.

Insurers and reinsurers largely agree with the Commission's proposals. CEA President Gerard de La Martiniere underlined that "the new regime should be flexible enough to allow SMEs with adequate risk management to continue to play their role in covering consumer needs".

Mick McAteer  of CEIOPS, the Committee of European Insurance and Occupational Pensions Supervisors, warned that consumers do not think as economists or regulators do. "Even one single company that goes bust affects consumers' confidence," he said. Concerning the consolidation foreseen as a consequence of the new rules, he urged authorities "to make sure to protect the pluralism and the diversity of the providers".

On the consultation on debtors' transparency launched yesterday by the Commission, Vice-President Franco Frattini commented : "The objective is to find possible measures at European level to improve the transparency of debtors' assets and the right of creditors to obtain information, whilst at the same time respecting the principles of protection of the debtor's privacy, which counterbalances the creditor's right to efficient recovery".