Solvency II Moves Ahead

The European Union’s Solvency II requirements have cleared a major hurdle. The Committee of Permanent Representatives in Brussels, Belgium has informally but unanimously agreed upon the text of the Framework Directive. “This is a decisive step toward the new, enhanced regulatory regime that we have been seeking for Europe’s insurers,” says Michaela Koller, director general of CEA, the European insurance and reinsurance federation. “We are happy that the timetable for implementing the Directive is on track. Solvency II is an important and timely piece of legislation and any delay would have been most unfortunate in the current economic climate.” The measure passed without inclusion of a clause for group support. Critics of group support, primarily smaller EU members, contend such a clause would strip them of the power to regulate multinational insurers operating within their borders. Proponents of group support, such as CEA, contend the measure would enable more efficient capital allocation for large cross-border insurance groups in order to meet solvency requirements. Widely expected to be formally endorsed soon, the Solvency II requirements would then be put to a vote before the European Parliament on April 22.