Solvency II: CEA reiterates position on SMEs and group supervision

The European Union’s planned Solvency II regime must be flexible enough to allow small and medium-sized insurers to continue to operate, Gérard de La Martinière, president of CEA, the European (re)insurance federation, told a packed conference on the proposed solvency requirements in Brussels today.

"The new regime should be flexible enough to allow SMEs with adequate risk management to continue to play their role in covering consumer needs," Mr de La Martinière told 200 high-level representatives from EU institutions, supervisory authorities and the insurance industry. 
 
"Making use of the principle of proportionality, Solvency II can achieve its objectives in terms of the level of protection it provides for policyholders without creating an unbearable administrative burden for smaller insurers."
 
The distinguished panel of speakers at the CEA conference included Charlie McCreevy, European Commissioner for Internal Market and Services and Peter Skinner, MEP and Solvency II rapporteur.
 
Commissioner McCreevy stressed the need to keep to the existing timetable for implementing Solvency II and not to make major changes to the proposal: "The Solvency II proposal should not be compromised and must enter into force as planned in 2012. If  we make substantial amendments to the proposal we will lose some of the expected benefits of the measures;"
 
CEA's Mr de La Martinière also reiterated the European insurance industry's support for the group support regime set out in the draft Framework Directive on Solvency II, which increases a group's financial strength by allowing it to pool and better allocate its capital resources. 
 
"Group support is critical to the success of group supervision under Solvency II. It is a transparent and effective way to recognise  the economic reality of groups, while maintaining control over the solvency of their individual entities," said Mr de La Martinière.
 
"Solvency II is not the end of national supervision, but marks the end of the current situation where group supervision is only supplementary to solo supervision. The Framework Directive introduces a system that requires the group and solo supervisors to cooperate more closely together. National supervisors will remain responsible for many important supervisory activities and at the same time benefit from mutual information-sharing and consequently a better understanding of the financial position and risk profile of the whole group."

CEA is the European insurance and reinsurance federation. Through its 33 member bodies, the national insurance associations, CEA represents all types of insurance and reinsurance undertakings, e.g. pan-European companies, monoliners, mutuals and SMEs. CEA represents undertakings that account for approximately 94% of total European premium income. Insurance makes a major contribution to Europe's economic growth and development. European insurers generate premium income of €1,065bn, employ over one million people and invest more than €6,900bn in the economy.