CEIOPS examines the extent of insurance supervision
The Committee of European Insurance and Occupational Supervisors (CEIOPS), the new regulator group inside the European Commission, is studying possible amendments to the directive on the supervision of insurance companies.
So far, the group is unsure about the need for changes to this bill, but it does highlight the need for efficient supervision of insurance companies.
The discussion on a possible need to amend this directive has come just as the European supervisors group started discussing Solvency II. Inevitably, the group's recommendations touched upon issues that will be addressed in Solvency II later on - primarily issues related to supervision. This is why the group stressed in its report that it will try to make recommendations on changes that it thinks need to be addressed or are simply out of the scope of Solvency II.
Some believe that there may not be a need to amend this legislation at all as supervisory issues have already been dealt with in recent texts such as the Guidelines for Co-ordination Committees. They argue that the protocol of CEIOPS gives them already carte blanche to organise European supervision as they wish, so why amend this directive? However, those who are in favour argue that changing the bill will align the old directive with a more recent one, the Financial Conglomerates Directive, which deals with supervision of financial conglomerates. According to sources inside the European Commission this seems to be the major concern for the Commission.
Regardless of which legislative text addresses these issues, the bottom line is that supervision in Europe needs to become even more efficient than it is today. The report says that supplementary supervision should not be a burden for insurance groups and a single co-ordinator with more authority may help.
The final report to the Commission is due in 2006 and the paper is open for consultation until early June.