16 November 2005

CEIOPS Conference Report: “New EU Regulatory and Supervisory Framework”

The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) held its Conference, titled 'Developing a New EU Regulatory and Supervisory Framework for Insurance and Pension Funds: The Role of CEIOPS' in Frankfurt. More than 250 participants attended, representing European institutions and organisations as well as the financial services industry.

Mr Bjerre-Nielsen gave an overview about CEIOPS work plan and the different work streams the Committee is engaged in. “This applies particularly to efforts in the field of supplementary supervision of insurance groups and, in the future, of financial conglomerates; areas in which convergence of supervisory practices and cooperation between supervisors could actually enhance the effectiveness of supervision and, at the same time, reduce the burden for supervised institutions” he said. Another important area is the implementation of IOPR-Directive. “CEIOPS has worked to smooth the supervisory co-operation and exchange of information between occupational pensions supervisors on the cross-border membership in an IORP. A Protocol on the latter is in the process of being agreed” Mr Bjerre-Nielsen stated.

Mr Trichet, President of the ECB, concentrated on financial stability issues. “The increased linkages between banks, insurance companies and pension funds may also increase potential vulnerabilities” he stated. The different contagion channels include the credit risk exposure of banks to insurance companies and pension funds; specific risks associated with the bancassurance model; and the link with the banks, although it is rather indirect as it concerns the potential destabilising impact of these institutions on financial markets.

Supporting the Lamfalussy approach, “a well-established cross-sector exchange of information is essential for a comprehensive monitoring of potential risks to financial stability and possible channels of contagion” Mr Trichet said. “I acknowledge that a good network of co-operation already exists between the BSC and CEIOPS and that the interplay between the three Level 3 committees is planned to be more structured” he continued.

Mr Asmussen, Director General of the German Federal Ministry of Finance mentioned some issues that governments should focus on. “We need a political agreement on what constitutes an adequate level of safety for setting solvency requirements for European insurers” he said. “Member States need to be satisfied that the changes in solvency requirements do not put EU insurers at a competitive disadvantage globally and that Solvency II improves the European regulatory level playing field.”

Asmussen also stated that governments should have concepts for co-ordinated action to prevent a mass of insolvencies or destabilizing pro-cyclical action by endangered insurers.

With regard to towards an integrated financial market, “the idea of a single European supervisor might come to one’s mind”, he said. “However, this might not be a short term issue. I believe that harmonisation of legal framework including its implementation and supervisory practice will be enhanced as we progress on the way towards Solvency II.” He continued. “We support the idea to establish peer reviews among the supervisory authorities which will contribute to convergence in day to day supervisory practices“.

Speaking for the European Parliament, Pervenche Berès, Chairwomen of the Economic and Monetary Affairs Committee, reiterated that “Parliament is displeased with the current situation arising from the currently valid comitology decision”. Mrs Beres continued that “We feel that for keeping the Parliament on the same footing with the Council as equal co-legislator, we need to be in a position to revoke the delegation of powers to the Commission and thus the financial services committees”.

With regard to the discussion about a lead supervisor Mrs Beres referred to a discussion in the case of insurance groups directive. “Unfortunately, the committee of supervisors involved in the case of a specific insurance group, rarely decided to nominate a lead supervisor. This indicates that there is a deep mistrust among regulators of the abilities of others” she said.

“It is important that we come to a political decision to give regulators the same tools and to ensure them comparable powers in all Member States” Mrs Beres continued. “Only then the principle of lead supervisor can work and cross border supervision can prove successful”.

For the European Commission Mr Terták, Directorate Financial Institutions, explained the workload for CEIOPS and the forthcoming issues of the Commission. He explained that the Commission is currently codifying and recasting the major part of the insurance acquis. “All Directives related to life, non-life, reinsurance, insurance groups and winding-up will be grouped together in one Insurance Rule Book” he said. “This will make 16 of our current directives disappear”. A first codification document will be presented to Member States' experts in EIOPC on 2 December 2005.

“In parallel, my Services have started the drafting work related to Solvency II. The new Articles will be fed into the Codified Directive text during the scope of next year”.

With regard to supervisory cooperation Mr Terták stated underlined that the Commission welcomes the work on a Memorandum of Understanding on the co-operation of supervisory authorities. “I am well aware that in some States, three different authorities will be involved in the supervision of pension institutions, but I am confident, that this fact does not constitute any invincible impediment”, he said.

Speech Bjerre-Nielsen
Speech Trichet
Speech Asmussen
Speech Beres
Speech Terták

Other speeches:
Alfred Bouckaert, AXA Belgium CEO and member of the AXA Group Executive Board - presentation on 'Developing the Work and Tools of Ceiops: the View of Market Participants'
Speech
Paul Carty, Deputy Chairman EU Standing Committee of BIPAR - presentation on 'Developing the Work and Tools of CEIOPS:The View of the Market Participants'
Speech
Mel Carvill, Deputy General Manager, Assicurazzioni Generali SpA - presentation on ' CEIOPS' Work on the Solvency II Project'
Speech
Gérard de La Martinière, President of CEA - presentation on 'CEIOPS' Work on the Solvency II Project'
Speech
Peter Lindblad, Vice-Chairman EFRP and Managing Director, Pensionsgaranti - presentation on 'CEIOPS' Work on the Implementation of the IORP Directive'
Speech
Chinu Patel, UK Representative, Groupe Consultatif Actuariel Européen, Pension Committee - presentation on 'CEIOPS' Work on the Implementation of the IORP Directive'
Speech
Jochen Sanio, President, Bundesanstalt für Finanzdienstleistungsaufsicht – „Closing Remarks“
Speech

© CEIOPS