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Regulation

Using private capital, facilitating innovation

Insurers can use their enormous capital to drive Germany's modernisation and decarbonisation. Their financial strength should therefore not be unjustifiably restricted, but rather private investment should be facilitated.

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Germany is facing enormous challenges: Converting our national economy to an ecologically sustainable, socially viable and, at the same time, internationally competitive economic model is not just a question of available capital. Insurers must also be able to trust that policymakers will create the necessary investment-friendly framework conditions and allow scope for innovation

This applies to the further development of the European insurance supervisory system Solvency II as well as to national and European tax policy, state support for innovative business models and start-ups, and cooperation between the state and the private sector in public-private partnerships (PPPs).

Our positions on regulation

  • Solvency II: Risk must remain the yardstick

    The review of the Solvency II supervisory system is entering the home stretch. The European Council is expected to take a position by mid-2022, the Parliament by the end of the year. The coalition agreement sets the right priorities in the ongoing legislative process: Changes to the system, especially to capital requirements, should be evidence- and risk-based. This is because a change in interest rate extrapolation that is not objectively justified could significantly limit life insurers' scope for long-term investment and thus reduce the potential for investment in climate-friendly infrastructure. This would run counter to the federal government's goal of improving conditions for long-term investment by capital collection agencies. Another positive aspect is the German government's commitment to taking greater account of the proportionality principle in the review. In this way, the complex set of rules could be better adapted to individual company business models and risk profiles in supervisory practice in the future.


  • Private investors as partners of the public sector

    Modernising public infrastructure requires a lot of capital and know-how. However, the new geopolitical challenges are narrowing the financial scope of the public sector. This makes private capital all the more important. Another advantage is that sustainable infrastructure measures can be implemented more quickly with private capital than via purely public procurement. This can significantly reduce costs for later generations. The coalition agreement already opens up the possibility of implementing selected individual projects within the framework of public-private partnerships. The fundamental commitment to the PPP option is an important step that the insurance industry has been advocating for some time.


  • Facilitate business start-ups and innovations

    Start-ups are an engine for innovation. A start-up-friendly environment is therefore an increasingly important competitive factor. The German government wants to provide impetus here and make Germany the "leading start-up location in Europe". Institutional investors are to be made more comfortable with venture capital financing via a future fund. The announced establishment of so-called reallabs and the introduction of statutory experimentation clauses could also promote innovative business models. From the insurance industry's point of view, however, improved framework conditions and facilitation of innovations should not be a question of size. They are also highly important for the innovation activities of established undertakings.


  • Simplify tax law and keep it competitive

    At various points in the coalition agreement, the German government advocates simple, unbureaucratic and digital tax law. In particular, major steps would be the waiver of the written form requirement and the introduction of simpler rules for digital archiving. The introduction of a global minimum tax can become an important building block for a fairer and more stable global tax order. However, a sense of proportion is required here. Contrary to what is stipulated in the coalition agreement, a considerable amount of bureaucracy is already emerging, which could be reduced in many places by simplifying and limiting the scope of application in a practical manner. In particular, the new global tax regime must not lead to double taxation and competitive disadvantages for German enterprises.


  • Prevention of money laundering Combating crime in a targeted manner

    Effectively combating money laundering is critical to society and business alike. It requires regulations that are as uniform as possible in Europe. We therefore support the German government's position that the requirements should be standardised throughout the EU by means of a European regulation. In order to deploy resources effectively, it is necessary to focus on high-risk issues that in turn depend on the specific business area. The insurance industry's fundamentally low money laundering risks must also be accompanied by correspondingly lower obligations and expenses - ultimately costs for undertakings and insured persons - as part of the risk-based approach. In this light, established national supervision familiar with the insurance business remains appropriate. There is no reason to transfer this to an EU authority.