The European Parliament’s ECON Committee discussed the review of Solvency II at its monthly scrutiny session on 16 May 2018.
To open the session, EIOPA provided an overview of its advice and the EC provided a similar overview of its work on the review. The questions and comments put forward by a number of MEPs were then answered by EIOPA and/or the EC.
Although the EC welcomed the bulk of EIOPA’s advice, it noted that a number of stakeholders raised concerns about the EIOPA own initiative advice on interest rate risk and that it “may be preferable” to revisit the issue as part of the review of the 2020 Review.
The secretariat Insurance Europe provides some high-level notes from the session below. A recording of the session is also available online (http://web.ep.streamovations.be/index.php/event/stream/20180516-1430-committee-econ).
Interest rate risk:
- EC (Martin Merlin) said that it is preferable to delay this point to 2020 as there is no clear reason for concern now even if IR are low.
- EIOPA (Fausto Parente) made the case for the proposal, however said they realise it has a big impact and may be considered in 2020.
- Apart from MEP Beres, the other MEPs who spoke were also of the view that no changes are needed now.
Risk Margin:
- MEP Fox made the case for it, nobody else picked up on the issue.
- It was not extensively discussed, EIOPA said no evidence to change the CoC. EC provided little comment.
- Informally, the EC mentioned afterwards that it is tending towards accepting EIOPA’s advice on the CoC unless more Member States speak about it. They noted that it is complicated by Brexit.
LAC DT:
- EC didn’t speak about it but EIOPA mentioned it.
- Again, informally the EC noted that they want to follow EIOPA’s advice, unless Member States complain. Some member states have noted concerns with the advice so there remains an opportunity influence on this topic.
Equity
- Martin Merlin noted that the EIOPA advice on unlisted equity provides a solid basis for an improved treatment.
- MEP Beres made the case for equity.
- Although acknowledging that are broader issues relating to the treatment of equity investments, Martin Merlin clearly stated that nothing will be done in the 2018 review as there is no legal basis in the level 2 text. The EC’s equity study was referenced a few times and is central to their work on equities as part of the 2020 review.
Other notes
- Overall, it was a poorly attended session
- Gualtieri made very good points on 2018 and 2020 (country adjustment in VA)
- MEP Klinz was very helpful, linking EIOPA own initiatives to ESAs review