European Committee Third Quarter Update 2009
OVERVIEW
It is now certain that Barroso will remain President of the European Commission. Although the Irish have produced a vote in favour of the Lisbon treaty, we are now waiting to see if the Czech President will sign it. So we still have no idea when the new Commission will take office, let alone who the Commissioners will be. I will not add to the weight of speculation on the subject.
CEIOPS has made sure that Solvency II will remain the main item on the European insurance agenda by producing a truly shocking set of advice on the implementing measures. ABI estimate that the consequences of some very conservative calibration by the regulators would be additional capital requirements of between £30 and £70 billion for the British industry alone, with similar consequences across Europe. CEIOPS’ refusal to accept the concept of a liquidity premium for annuities is the largest problem, but by no means the only one. The final decisions on this will only be taken by the Commission at the end of next year. The ABI have, therefore, mounted a long distance campaign. The main target is the European Commission, but all bodies with influence will be covered. Our letter of protest to the Chancellor was leaked to the front page of the Financial Times in mid August. A delegation of CEOs met Lord Myners in early September. Our European federation the CEA completely shares ABI views. Stephen Haddrill met the Commission Director-General Jorgen Holmquist at the end of September. A recent speech by Commissioner McCreevy helpfully underlines that the Commission will take full account of the industry’s views when evaluating CEIOPS’ advice. There is a long way to go, but we have made a start.
The Commission has produced a set of legislative proposals on strengthening the system of financial supervision. As expected, these establish a macro-prudential body (ESRB), and three sectoral regulatory authorities. The ESRB is dominated by banking interests, and could within advantage have access to more insurance expertise. ABI has supported the case for strengthening the framework at EU level, but our initial thinking is that the Commission may perhaps have gone too far in framing the powers for the regulatory bodies. A last resort power is envisaged – in the event of continued disagreement between national regulators - for the European authorities to issue decisions direct to insurers. This risks leaving insurers subject to contradictory regulatory demands.
The Commission has opened a consultation on the renewal of the Block Exemption. Two of the elements would be preserved. ABI will be repeating its arguments in favour of the complete renewal of the Exemption – including security devices and standard terms and conditions.
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ISSUE
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ABI LEAD COMMITTEE
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1
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Cross-border healthcare
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Health
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2
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Packaged Retail Investment Products
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European
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3
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Block Exemption Regulation
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European Committee
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4
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Review of Insurance Guarantee Schemes
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Financial Regulation & Tax
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5
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Alternative Dispute Resolution in Financial Services
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European
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6
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Solvency II Directive
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Financial Regulation & Tax
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7
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Discrimination in the provision of goods and services
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European
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8
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Proposal for a Regulation on the Rights of Bus and Coach Passengers
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Motor/European
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9
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Review of the Capital Requirements Directive
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Investment
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10
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International Financial Reporting Standards
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Financial Regulation & Tax
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11
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Retail market study on motor and home insurance
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Motor/European
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12
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Review of VAT on insurance
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Financial Regulation & Tax
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13
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Taxation of Savings Directive
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Financial Regulation & Tax
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14
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Review of the Financial Conglomerates Directive
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Financial Regulation & Tax
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15
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Remuneration
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Investment
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16
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Collective Consumer Redress
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European
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17
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Consumer Rights Directive
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European
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18
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Alternative Investment Fund Managers (Hedge Funds and Private Equity)
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Investment
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19
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European Financial Supervision
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European
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