By Martin Banks - 7th November 2012
We are talking here about something that helps fund the economy so the stakes are enormous
Plans to make all insurance companies in the EU meet the same capital requirements are at risk of failing.
That was the stark message to emerge from a debate on the EU's Solvency II directive, which is designed to impose common capital requirements and risk management standards across the member states.
The event in parliament on Tuesday heard that, officially, the Solvency II measures are due to be implemented at the start of 2014, when they are expected to have wide-ranging implications for the assets that insurers hold and the businesses they underwrite.
But as French EPP deputy Jean-Paul Gauzès pointed out, the draft legislation has been subject to repeated delays and any further slippages to the timetable could make the 2014 target date unlikely.
And failure to implement the directive on time, he warned, could have serious consequences.
"We are talking here about something that helps fund the economy so the stakes are enormous," he declared.
Gauzès, who is EPP coordinator in the economic and monetary affairs committee, was one of the keynote speakers at the event, "Making Solvency II work," on 6 November.
The debate was co-hosted by the The Parliament Magazine in conjunction with the Italian banking, insurance and finance federation (FEBAF) and the Association of Italian insurers (ANIA).
The roundtable discussion was designed to give an overview of the state of play of Solvency II.
Another panellist, was Gabriel Bernardino, the first ever chairman of the Frankfurt-based European insurance and occupational pensions authority (Eiopa), which is the EU's top insurance regulator.
He told the gathering that the commission had considered pushing back the start of the regime by another year and said the changes may not be adopted before 2016.
He also pointed out that MEPs had rescheduled a plenary vote on Solvency II from 20 November to 11 March next year. It is currently the subject of a wide-ranging impact assessment procedure.
Bernardino said that new legislation was required because Solvency I is unable to "capture the complexities" of today's business world.
Markedly, Bernardino, who took up his post in March 2011, also warned that Europe was "lagging behind" other parts of the world in its supervision of the insurance sector.
"The truth is that Europe currently does not meet international standards on insurance supervision and I find this incredibly bad," he told the debate.
What was now required, he argued, was the "same level of commitment" when it comes to implementing the directive as was the case in adopting the law back in 2009.
However, he cautioned, "What we also need, though, is a realistic and credible timetable for implementation."
"Generally though, it has to be said that this law offers an important opportunity and one which we must grasp."
Italian MEP Alfredo Pallone, who hosted the event, reminded the audience that the overall aim of the directive was to "reduce volatility" in the insurance sector.
He added, "These measures are very important but, at present, the proposals are blocked and this worries me somewhat as the objective is to improve protection to customers."
Elsewhere, further comment came from Dario Focarelli, the director general of ANIA, who said that despite the various delays in implementing the Solvency II directive, the Italian insurance industry "fully supports" reform of the insurance framework.