Economy EU watchdog eyes macro-prudential angle for insurer rules

EU watchdog eyes macro-prudential angle for insurer rules

Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA)
Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA)

EU insurance watchdog EIOPA will examine adding broad-brush measures aimed at reducing the risk of financial crises to its capital rules for insurance companies over the next few years, it said on Tuesday.

The EU’s risk-capital rules for insurers, known as Solvency II, came into force at the start of this year, and their effectiveness is to be re-examined after five years.

“Our proposal is to use the 2021 overall review to integrate in Solvency II a macro-prudential framework for insurance,” Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA), told an insurance conference.

“This approach would ensure the coherence between micro- and macro-elements, avoid the emergence of conflicting incentives to insurers and facilitate the implementation of the regimes by the respective authorities,” Bernardino said, adding that regulators would look at insurers’ funding models and new instruments as part of the effort.

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