In his speech to the Insurance Institute of London, European Commissioner for Internal Market and Services, Charlie McCreevy presented an overview of progress to date with the Solvency II project and the remaining milestones which lie ahead.
McCreevy argues that Solvency II will fundamentally change insurance regulation in the EU, although the degree of change will be dependent upon the nature of supervisory regimes already in place. He stressed to the audience that the proposed directive would not be compromised by further amendments. The only corrections likely to be made would reflect changes to EU legislation.
McCreevy emphasised the importance of a timely implementation of the directive. It is expected that the Council and European Parliament will adopt the directive at the end of this year. The ‘Level 2’ implementing measures - the more detailed and specific legislation under the Lamfalussy process - are expected to be adopted by the European Parliament in 2010. McCreevy notes that once adopted supervisory convergence across member states will be critical if the project is going to be successful. Mr. McCreevy took the opportunity to suggest that a successful European solvency regime could recognise ‘third-country’ (ie non-EU) equivalence. Third country equivalence may well incentivise the US in dropping its current collateral requirements.
Before finishing the speech, Mr. McCreevy, discussed whether Solvency II would be extended to pension funds. He mentioned that before any such decision was taken CEIOPS, (the Committee for Insurance and Occupational Pension Supervisors) will need to conduct a ‘fact-finding’ exercise on the issue. For further information: European Commission's policy priorities for the insurance sector.