The European Parliament adopted new rules yesterday (22 April) to cut risk in the insurance sector and better protect policyholders.
The Solvency II reform updates 30-year-old EU insurance laws by taking into account how the sector is now dominated by a dozen or so big cross-border groups such as Allianz, Generali, AXA and Aviva.
The Parliament plenary voted to approve the legislation, with 593 MEPs in favour and 80 against. A deal had been informally agreed with governments before the vote, which have joint say with the EU assembly on the file under the co-decision procedure.
“It’s clear with the financial crisis that the insurance industry is something which cannot be left alone,” said British Socialist member Peter Skinner, who steered the measure through Parliament.
The CEA, an insurance lobby group, said they were “delighted” that the European Parliament had approved the Directive.
CEA Director-General Michaela Koller said that the directive would make “an enhanced regulatory regime for Europe’s insurers” a reality.
The agreement will see the establishment of colleges of supervisors, in which national supervisory authorities would be required to cooperate. It is hoped that colleges will facilitate oversight of cross-border insurance activity.
The new supervisory system would also mean economic gains for insurance companies, since the firms would no longer need to deal with several national regulators, but just with one group.
However, the system has been criticised for not having a clear mechanism to solve disputes between national supervisors.
There will be a plenary vote today (23 April) on a proposed law on the mandatory registration and supervision of credit rating agencies.
(EURACTIV with Reuters.)