09 April 2008

McCreevy: Solvency II project too important to fail

“Member States and the Parliament must show that they are able to agree on adequate prudential standards to protect policy holders”, Commissioner McCreevy said. “In particular, we need to agree on group supervision and the group support regime.”

With regard to the current financial turbulence supervisors need to be better equipped to deal with the international nature of financial markets, McCreevy underlined.

The concept of a group supervisor as envisaged in Solvency II does not mean that countries with many head offices of groups, such as the UK, will become a kind of super-regulator, the Commissioner explained.

“Even under the group support regime, local supervisors retain the control over the Minimum Capital Requirement. It is the breach of the MCR rather than that of the Solvency Capital Requirement that triggers ultimate supervisory action”, McCreevy said.

“Another topical issue at the moment is the potential extension of Solvency II to pension funds”, McCreevy said. “Pension funds will clearly be a key area for us this year, not for action but for reflection.”

CEIOPS is presently examining the existing solvency rules for pension funds. The CEIOPS report will be published in April.

Focusing on the Single Market Review, the Commission intends to undertake several different strands of further work including the use of national general good requirements and to what extent they comply with the criteria set by the European Court of Justice and the Commission Interpretative Communication of 2000.

The Commission will also work on an inventory of national general good requirements, and possible cases of abusive or excessive enforcement will be discussed with the Member States.

Reasons for relatively large price differences between the Member States both for the most important retail insurance products such as motor insurance and property insurance will also be explored.

On the IMD possible amendments could only be considered if there is a proper examination of the issues. The CEIOPS Working Group on insurance intermediaries agreed with the Commission that no immediate legislative changes to the Directive are necessary, McCreevy said.

Full speech

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