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03 December 2010

AMICE comments on the EC White Paper on Insurance Guarantee Schemes


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AMICE members do not believe that there is a need for additional systems for policy-holder protection – their philosophy, business model and governance are already focused on this objective.


As a point of general introduction, AMICE  states that many among AMICE’s membership question the real need of a European approach towards insurance guarantee schemes:

·         AMICE acknowledges the importance of policyholder protection. For mutual and cooperative insurers, this overarching objective is even more the central focus of their business model since policyholders, i.e. the members of mutual and cooperative insurers, are their undisputed key takeholders (and in many jurisdictions regarded as the owners of the mutual/cooperative). Their interests are not in competition with the interests of external shareholders.

·         The current Solvency II project is also mainly driven by the objective of policyholder protection. With its elaborate system of financial requirements, internal and external review processes, governance structures and transparency, Solvency II is designed not only to make insurance undertakings more solid (thus reducing the likelihood of a guarantee case); it also provides supervisors with an array of tools and early warning indicators which should make it even more likely that a guarantee case occurs. AMICE notes that the Commission “strongly encourages portfolio transfer” to a solvent insurer in the case of (threatening) failure of an insurer. AMICE argues that Solvency II provides, through its design, sufficient warning mechanisms and warning time to assure that harm to policyholders can be avoided through portfolio transfer.

·         AMICE also feels that starting a discussion on Insurance Guarantee Schemes parallel to the work on Solvency II provides a very ambiguous signal about the confidence in the new prudential and supervisory framework. AMICE fears that giving the sign that Europe needs an upgrade in IGSs “on top of” Solvency II could be detrimental to the efforts to establish the European solvency framework as the globally leading model of insurance regulation and supervision – with effects on the global competitiveness of European insurers and, more concretely, on the current and future discussions about equivalence of prudential systems.




© AMICE - Association of Mutual Insurers and Insurance Cooperatives in Europe


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