After the crisis: Changes in Regulation in Europe...

- the most important trends and influences upon the insurance market

Michaela Koller, director general, CEA

Budapest, 05 October 2010

Key developments post-crisis

International convergence: new emphasis

Stability: new core focus

Systemic relevance Supervisory architectureTax/levies/funds

Prudential requirements: increasing

Conduct of Business Rules / Consumer Protection: increasing

2

A global post-crisis agenda

Globally shared policy objectives

Global financial stabilityStrengthened supervisory and regulatory regimes Industry contribution to crisis prevention ./. Taxpayer

Key outcomes determined at G20 level

Stronger role of international for a such as

Financial Stability BoardJoint Forum:

Basel Committee, International Association of Insurance SupervisorsIOSCO

IMF3

EU supervisory architecture

New European supervisory authorities

European Systemic Risk Board - macro-level supervisionWill identify risks to financial stability Will issue warnings and recommendations

European Supervisory Authorities – micro-level supervisionBinding powersCan take decisions on companies in certain circumstancesWill draft (binding) technical standardsWill assess systemic importanceWill develop criteria to establish a stress testing regime

TimelineNew architecture in place in 2011

4

Financial sector contribution to the crisis

Fast-moving target: at all levels G20 – EU - national debates

G20 to decide at next summit in November

IMF recommends options that would include the insurance industry

Financial stability contributionFinancial activities tax

Financial sector contribution to the crisis

EU CouncilPolitical push towards a financial sector tax / levies

European Commission parallel initiatives

Crisis management regime, including resolution funds Discussions focused on banks – but to be extended to insurers

Bank leviesTransaction tax – “innovative financing”

European Parliament Recurrent requests to EC and Council to move forward on a broad basis

EU: no agreement on “stability fund” or a central IGS in the context of the new supervisory architecture

Solvency II – increased capital requirements?!?

7

Solvency II Directive agreed

Appropriate answer to the crisis for the insurance sector

Implementing measures under development

Concerns over Ceiops adviceNeed for data – QIS 5 instrumental

QIS 5 exercise

EC corrected Ceiops original advice to some extentFurther correction requiredCall for high participationTiming

Increased consumer protection

Distribution and selling practices

Packaged Retail investment productsInsurance Mediation Directive

Insurance Guarantee Schemes

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