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17 July 2014

EIOPA: The future of life insurance, Solvency II and investment strategies


Speech by Gabriel Bernardino, Chairman of European Insurance and Occupational Pensions Authority, addressing the current state of preparation for Solvency II implementation and those regulatory and supervisory initiatives that have been undertaken by EIOPA with regard to the upcoming regime.

In the aftermath of the financial crisis it is a clear political objective of the EU institutions to reinforce the regulation and supervision of the financial sector in order to promote financial stability and strengthen consumer protection, supporting the public confidence and the trust of citizens. 
In the insurance area this political commitment is reflected in the evolution of the EU regulatory framework, in particular with Solvency II, and in the responsibilities entrusted to EIOPA as part of the European System of Financial Supervision. 
The implementation of Solvency II needs to be used as an opportunity to further embed a strong risk culture in the day to day operations of undertakings, providing for an appropriate balance with the natural sales-driven culture. Risk considerations and their capital consequences should be explicitly taken into account in the strategic decisions of insurance companies. 
All in all Solvency II will bring significant benefits for consumers: more sustainable promises and products; more accurate and fairer pricing coming from better knowledge of the risks and better data used; better governance ensuring more balanced and fairer decisions; more transparency and disclosure by insurers and better and more effective supervision through reporting requirements more adapted to risks. 
Mr. Bernardino said: "EIOPA will be monitoring attentively the implementation of the new risk based regime in order to make sure that we will reap the projected benefits for consumers and for the stability of the financial market. We count on the German insurance industry to lead the way in this direction. If you work together you will be as successful as the magnificent German football team that won the world cup. "
 


© EIOPA


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