The EC has published a White Paper setting out a framework for EU action on insurance guarantee schemes (IGS). This proposes a Directive to ensure that all EU member states have an IGS that complies with a set of minimum requirements.
As demonstrated during the recent financial turmoil, the risk of insurer insolvency in the EU is low. The CEA firmly believes insolvencies will become even less likely once the EU’s enhanced regulatory framework, Solvency II, comes into force at the end of 2012.
“We are convinced that Solvency II, being a risk-based regulatory regime, increases the level of consumer protection, but nevertheless recognise the European Commission’s objective of safeguarding consumers even in the most extreme circumstances,” said CEA director general Michaela Koller.
Should the EC decide to go ahead with a legislative initiative in this area, the CEA supports its proposal of minimum harmonisation of national schemes. This would accommodate existing national systems that function well and are adapted to local conditions and consumer needs.
However, the CEA questions pre-funding of IGS as suggested by the EC, and believes that the decision on how to fund schemes should be left to individual EU member states provided that equivalent protection is given to policyholders.
Koller said: “Attention must be paid to ensure that IGS, combined with the other initiatives envisaged by the Commission, does not place a disproportionate compliance burden on the insurance sector, which would in turn be to the ultimate detriment of consumers.”
The EC is running a consultation until 30 November and the CEA will be providing the Commission with detailed comments on its proposals.
© CEA - Comité Européen des Assurances
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