With the much awaited implementation of Solvency II, the European insurance and reinsurance sectors are expected to experience a transformation.
This is the message from Commissioner Charlie McCreevy, member of the European Commission, speaking at Lloyd’s yesterday.
Commissioner McCreevy explained the progress in the negotiation of the Solvency II Directive and outlined his key priorities.
“The benefits of Solvency II will fundamentally change the insurance sector but it will require a dependency on each country’s framework,” he said. “Our key priority is that Solvency II is adopted without compromise. The European Parliament and the Council have discussed this issue and hopefully there will not be too much change.”
However, Commissioner McCreevy added that some level of compromise is needed as he added: “If there is enough agreement in Level I then it will be easier to settle Level II.”
To date there have been two Council meetings where significant group progress was made as well as necessary updates. The votes in the European Parliament and the presentation of the report to the Committee of Monetary Affairs mark the key milestones in the process of developing this Solvency II Directive further.
It will also look at ensuring that small and medium enterprises are not unduly burdened, and that their financial expenditure is proportional to their business.
“This is a new framework for the insurance industry and I encourage you all to participate,” Commissioner McCreevy told the Lloyd’s audience. “There has been significant interest outside Europe and I hope that this Directive will be world leading.”
Once implemented, Solvency II can then be used as a template and applied to bank principals as well. “I would like to think that Solvency II might become the gold standard in the world,” added the Commissioner.
