Solvency II: Improvements Needed to Boost Competitiveness
The draft Delegated Regulation on Solvency II, published yesterday, marks a step forward. Insurers welcome the progress but still see a need for improvements.
“In this legislative term, the Commission promised less bureaucracy and more competitiveness – but the draft still contains too few concrete improvements,” says GDV’s CEO, Jörg Asmussen. “If we want to stay competitive globally, the EU needs to step up.”
One key issue is the valuation of long-term liabilities, such as in life insurance. This is crucial for reliable retirement provision. “Stable valuation rules are the foundation that allows us to offer customers secure and attractive guarantees,” Asmussen says. “But the proposed technical parameters do not ensure this stability in the long run.” From the association’s point of view, the rules must work reliably under different market conditions.
Reporting requirements are also in need of reform. Small and medium-sized insurers in particular, are heavily burdened by complex obligations. “Lengthy reports help neither customers nor supervisors,” Asmussen explains. For instance, the Solvency and Financial Condition Report (SFCR) is hardly comprehensible to policyholders. Instead of a full report, insurers should simply publish their coverage ratio clearly and transparently – that would be far more practical and less bureaucratic.
