Financial services: Commission launches a public consultation on the review of EU insurance rules
The European Commission has today launched a consultation on the review of the EU’s prudential rules for insurance and reinsurance companies (the so-called “Solvency II Directive”). The Solvency II Directive, which came into effect in 2016, sets out harmonised, risk-based rules across the EU for insurance companies and promotes transparency, comparability and competitiveness in the sector. In order to ensure that these rules are still fit for purpose, the Commission is carrying out a comprehensive review of the prudential framework, building on the experience gained over the past few years. This review is also an opportunity to see how the insurance sector can contribute to the objectives of the European Green Deal and the Capital Markets Union, and the Commission’s overall efforts to ensure the EU’s economic recovery following the coronavirus crisis. Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Europe’s insurance companies are and will remain one of the largest investors in our economy. They help us manage the risks that we face in today’s uncertain economic climate. Our world-leading prudential regime, Solvency II, has ensured that our insurance sector remains resilient, despite the current challenges posed by the coronavirus pandemic. However, it is right and timely to ask whether these rules are still fit for purpose. Specifically, we want to find out if they still provide the right incentives for insurers to support the long-term financing of a strong, sustainable and resilient economic recovery in the EU, while ensuring that consumers’ rights are protected.” The Commission wants to collect as many views as possible on the main challenges and opportunities in the insurance sector, including from individual policyholders, consumer associations and financial market participants. In addition to today’s consultation, the Commission has also published an inception impact assessment. On the basis of feedback received, the Commission will come forward with a legislative proposal in the summer of 2021.