CEA calls for level regulatory playing field for pension providers

16 November 2010
by CEA -- last modified 16 November 2010

The CEA, the European insurance and reinsurance federation, has called on the European Commission to tackle the current patchwork of regulation applicable to pension providers in the European Union.

In its response to the EC's Green Paper "Towards adequate, sustainable and safe European pension systems", the CEA calls for the principle of "same risks, same rules" to be applied to the regulations covering life insurers, institutions for occupational retirement provision (IORPs) and mutual funds offering guaranteed benefits.

The new Solvency II regulatory regime for the insurance industry applies risk-based valuation and regulatory capital requirements, while the IORP Directive still follows a non-risk based approach. Applying Solvency II-type rules to IORPs would strengthen the single market for pensions, address regulatory gaps and avoid regulatory arbitrage.

"The Solvency II principles are appropriate for pension funds, provided the economically significant differences between pension products and schemes are taken into consideration," says the CEA in its response to the Green Paper.

"We can see no reason why Solvency II principles should be appropriate for only one significant segment of the industry," said Michaela Koller, director general of the CEA. "The EC must launch an immediate project — including an impact assessment — for the application of Solvency II-type regulatory principles to IORPs."

Background

The wide-ranging Green Paper "Towards adequate, sustainable and safe European pension systems" was issued by the EC in July. It addresses 14 questions on topics ranging from the mobility of pensions within the EU to the future solvency regime for pension funds.

The CEA is the European insurance and reinsurance federation. Through its 33 member bodies - the national insurance associations - the CEA represents all types of insurance and reinsurance undertakings, eg pan-European companies, monoliners, mutuals and SMEs. The CEA, which is based in Brussels, represents undertakings that account for around 95% of total European premium income. Insurance makes a major contribution to Europe's economic growth and development. European insurers generate premium income of over EUR 1,050bn, employ one million people and invest more than EUR 6,800bn in the economy.

CEA, the European insurance and reinsurance federation