During a public hearing concerning the draft circular of the German regulator dealing with “Regulatory minimum requirements of risk management” BaFin has reiterated that the principles of the circular which implement parts of the Solvency II regime will not be used to control the business decisions of German insurers. BaFin reacted to some of the concerns raised by insurers but did warn German insurers to prepare ahead for Solvency II and not wait until 2012.
BaFin is apparently planning to help a timely implementation of the Solvency II directive by anticipating part of the regime through circulars and memos to the German industry which will enable insurers to benefit from some of the changes before 2012. BaFin emphasised that Germany must not lag behind the rest of Europe on its implementation of Solvency II.
Regarding the circular detailing the framework of a risk management system, one of the main topics of discussion was a proposal by pension funds to be excluded from the regime as the obligation upon employers to pay pensions to employees in case of default was not yet reflected. GDV, the German association of insurers, is in favour of including pension funds to ensure that there is a level playing field with insurers.
For further information on Solvency II: "Understanding Solvency"