European Fourth Quarter Update 2009

OVERVIEW

At this time of year, tradition requires that, sitting in a frozen Gresham Street, I look back over our achievements in 2009. I concede grudgingly that we have had some successes. The Solvency II Framework stands out as a ground-breaking achievement by our colleagues in Financial Regulation and Tax Directorate, harmonising prudential regulation for insurers at EU level on the basis of market valuations. The chances are that, against the odds, we will preserve half of the Insurance Block Exemption.  A sensible agreement on the Rights of Bus and Coach Passengers has avoided a claimant’s charter.

We can also thank Providence that a number of proposals with unsatisfactory insurance clauses made no headway. The Directives on Taxation of Savings, and on Anti-Discrimination, both look far from agreement.  Delay does not always work in our favour: we had finally achieved a decent exclusion of UK-style PMI from the Directive on Cross-border Health Care, but Health Ministers found many other issues to disagree about.

This looks like a rather meagre return for the hardest year’s work any of the EU team can remember.  And, looking forward to 2010, it is difficult to identify causes for optimism.  Our strongest arguments are the good performance of insurers in the financial crisis, but we will continue to swim against the regulatory tide of proposals driven by banking issues.  Already CEIOPS’ proposals on implementing measures for Solvency II have been tainted by bank thinking.  Insurers will also need to position themselves with care when the EU authorities make proposals on systemic risk.  Finally, the PRIPs initiative will represent the Commission’s first move into the retail market for several years, facing insures with some very difficult choices.

Bah humbug!

SUMMARY TABLE OF EU ISSUES