Solvency II May be Altered

Brussels – Under a new measure that may be proposed as early as July 10, insurers within the European Union that conduct business across various borders may be supervised by regulators representing larger groups.  EU Internal Market Commissioner Charlie McCreevy is expected to propose Solvency II, a law designed to help regulate how insurers set aside money to cover risk and provide increased policyholder protection while creating a more competitive insurance marketplace.   But Peter Skinner, who is expected to steer the measure through parliamentary channels, said lawmakers were already considering a "plan B" if no deal is reached on the supervisory aspects of Solvency II.  Conflicting news reports state that the Solvency II deadline may be moved to 2010. Currently, multinationals such as Allianz, Generali, Aviva and Axa, account for 85% of total premiums in Europe, and represent 14 of the bloc's 27 member countries. The fear, say analysts, is that if a new measure is passed, national watchdogs could be given a limited role as supervisors in London, Frankfurt and Paris, home to many of the big groups, take charge. Lawmakers say that the assembly and EU states have joint say on Solvency II. A 28th regime would likely be a voluntary scheme outside existing legislation in the 27 EU member states. Skinner reportedly wants home regulators to be responsible for approving an insurer, with local watchdogs keeping a day-to-day eye on how much capital groups have locally to cover domestic risk.   Sources: Reuters, The Insurance Insider