Insurance Europe has published its response to the European Commission’s Better Regulation consultation on its proposals for the review of the Solvency II regulatory framework. While the Commission’s proposals include a range of helpful and necessary changes, they also include elements which would undermine the improvements and/or add avoidable costs.
While Solvency II has provided many of its intended benefits, the framework requires improvements as it does not correctly reflect insurers’ long-term business model. This results in excessive capital burdens and solvency volatility for European insurers. It has also created a very significant, and in some cases unnecessary, operational burden for insurers.
These deficiencies result in negative impacts for consumers, both directly through increased costs and less optimal investments and indirectly due to reduced product availability and guarantees. They also constrain the insurance sector’s ability to contribute to the EU’s pol
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