Globalisation of insurance regulation - PowerPoint PPT Presentation

About This Presentation
Title:

Globalisation of insurance regulation

Description:

Challenges for an insurance industry facing a new, more complex ... Preference must be given to solutions which envisage and anticipate insurance insolvency ... – PowerPoint PPT presentation

Number of Views:206
Avg rating:3.0/5.0
Slides: 28
Provided by: Mal7152
Category:

less

Transcript and Presenter's Notes

Title: Globalisation of insurance regulation


1
Globalisation of insurance regulation
Christian Pierotti Senior Manager International
Affairs and Institutional Relations Comité
Européen des Assurances (CEA)
ARIA Conference
St.Petersburg,27-29 May 2004
2
Speech outline
  • CEA - Reminder
  • Challenges for an insurance industry facing a
    new, more complex regulatory environment
  • Globalisation of insurance regulation
  • Looking into the future

3
CEA, the "pan-European" insurance federation
Membership 32 national insurance reinsurance
associations
30 full members 25 EU Member States 5
Other Markets

Iceland Liechtenstein Norway Switzerland Turkey
2 associate members
Bulgaria Croatia
2 observers
Russia AISAM (mutual insurers)
4
European Insurance in Figures
2004 Premium Breakdown per Class
2004 Data CEA (32 markets) EU-25
Total premium income (bn EUR) 926 (bn EUR) 875
Investments (bn EUR) 5823 (bn EUR) 5460
Number of companies 5024 4809 (2003)
Number of employees 1 015 903 974 549 (2003)
5
Speech outline
  • About CEA
  • Challenges for an insurance industry facing a
    new, more complex regulatory environment
  • Globalisation of insurance regulation
  • Looking into the future

6
EU regulation impacts the value drivers of
insurance business
Environmental liability Product liability Gender
equality Feed hygiene Occupational pensions
Solvency II IAS/IFRS Reinsurance Transparency
Guarantee schemes
7
Structure of CEIOPS Committee of European
Insurance and Occupational Pension Supervisors
8
CEIOPS role in EU insurance regulation
  • Decentralised body that receives its mandates
    from the EU Commission
  • CEIOPS is in its second year growing importance
  • Very important for lobbying, but more difficult
    to lobby than before because it decentralises
    legislation of regulations
  • Because CEIOPS members are the insurance
    regulators of the EU member states, strong
    contacts with all of the member states is
    necessary

9
The insurance industry is facing an acceleration
of new EU legislation
DG Markt 35  DG Sanco 10 DG Empl 4 DG
Tren 4 DG Jai 4 DG Taxud 2 DG Comp 2 DG Env 2 DG
Regio 1 DG Entr 1 DG Agri 1
Number of initiatives per DG at origin
Source CEA Chronicle of main EU initiatives
since 1990
10
CEAs current priority issues regarding regulation
  • IFRS Phase II
  • Solvency II
  • FSAP (post)
  • Pensions
  • Taxation- Products- Companies
  • Insurability of new risks- New liabilities and
    compulsory schemes- Catastrophic events

11
Speech outline
  • About CEA
  • Challenges for an insurance industry facing a
    new, more complex regulatory environment
  • Globalisation of insurance regulation
  • Looking into the future

12
3. Globalisation of Regulation
  • The International Association of Insurance
    Supervisors (IAIS) plays an increasingly
    important role in the regulatory process.
  • 95 of the world's insurance business is done in
    OECD countries, making its reform work very
    influential.
  • The EU Commission also tries to coordinate
    important regulation at the international level
  • Participation of the DG Internal Market at IAIS
    meetings (Solvency, Accounting, Reinsurance, and
    Mutual Recognition)
  • EU-US regulatory dialogue on insurance through
    CEIOPS

13
More than 30 insurance-related legislative,
regulatory and supervisory bodies
April 2005
Global environment
IAIS
OECD
EU
IOPS
SANCO
MARKT
EMPL
TAXUD
European Commission
ENV
COMP
ECON
EMPL
Economic and Social Committee
IMCO
TRADE
AGRI
European Parliament
TREN
ENTR
INTA
ENVI
IMF
UNEP
JURI
ITRE
ARC
Council of Ministers/ EU Presidency
European Central Bank
ECJ
IASB
IFRIC
EFRAG
EFC
IAA/EAG
EIOPC
WTO
WB
FCC
Cross-sectoral issues
IORPS
Helsinki
CEIOPS
Advisory Group
FCC
Financial stability
Solvency II
NCOIL
NAIC
central bodies
representation of States
14
International Association of Insurance
Supervisors (IAIS)
  • Represents insurance supervisory authorities in
    180 jurisdictions
  • Promotes cooperation among the members
  • Sets model international standards for insurance
    supervision and regulation
  • Coordinates work with regulators in other sectors
    and international financial institutions

15
Organisation for Economic Cooperation and
Development (OECD)
  • Forum to promote regulatory convergence through
    non-binding agreements (soft law)
  • Composed of 30 member countries that maintain
    relationships with 70 other countries as well as
    NGOs
  • Major insurance market participants are members,
    including the EU and US

16
Speech outline
  • About CEA
  • Challenges for an insurance industry facing a
    new, more complex regulatory environment
  • Globalisation of insurance regulation
  • Looking into the future

17
Financial Communication (1)
  • IAS 39 Settling the last issues
  • IAS 39 endorsed with a carve out for two elements
  • CEA favours full fair value option
  • Tentative proposal IASB (2005) making the use of
    the fair value option in certain circumstances
    possible
  • Although still preferring an unlimited fair value
    option, European insurers support new IASB
    approach
  • Next steps settling the transitional
    arrangements and the endorsement of the new
    proposal by the EU

18
Financial Communication (2)
  • IFRS 4 Phase II (insurance contracts)
  • No final standard for insurance contracts ready
  • IFRS 4 is a transitional standard which
    introduced few changes
  • Phase II was initiated in July 2004
  • So far only educational sessions no decisions
  • The future framework must adequately reflect the
    economic reality of how insurers run their
    business.

19
Insurance Guarantee Schemes
  • Nov. 2001 EU Insurance Committee started to
    question the lack of harmonisation
    co-ordination of national policyholder guarantee
    schemes
  • CEA is against the mandatory establishment of
    insurance guarantee schemes.
  • Preference must be given to solutions which
    envisage and anticipate insurance insolvency
  • Next steps
  • Draft proposal ready by the summer 2005?
  • Followed by extensive impact assessment
  • No proposal should be adopted in 2005 by the
    Commission

20
Solvency II redesigning the backbone of
insurance operations
  • Solvency II will affect every aspect of insurance
    operations
  • Aiming for a system that reflects the true risk
    profile of insurance undertakings
  • Balancing between adequate safety levels for
    policyholders and competitiveness of industry
    remains competitive
  • A progressive process, requiring constant input
    from the insurance industry
  • CEA is delivering this input at all stages

21
Post-FSAP
  • 11 May 1999 Adoption of the Financial Services
    Action Plan (FSAP)
  • 3 May 2005 Green Paper on Financial Policy
    2005-2010 with most of CEA comments taken into
    account
  • Next steps
  • Consultation until 1 August
  • White Paper in November

Commissions focus
  1. Consolidation of existing legislation, only few
    new initiatives
  2. Ensuring the effective transposition of EU
    legislation into national law
  3. Continuous ex-post evaluation whereby the
    Commission (EC) will monitor carefully the
    application of rules in practice and their impact
    on the European financial sector

22
Access to the pensions market
  • Directive on the activities of institutions for
    occupational retirement
  • provision (IORP) of May 2003
  • Sets the prudential framework
  • Opening of market with great potential
  • To be transposed into national law by 23
    September 2005
  • Optional for Member States to apply these rules
    to life insurers
  • Next step will be to address the fiscal and
    social aspects linked to the
  • portability of pensions

23
New or developing risks
  • National and EU legislators are examining how
    insurance can help take the burden off the public
    purse
  • But, insurance cannot be the panacea for all
    emerging risks
  • Difficulties in estimating losses and
    compensation
  • Nevertheless, public authorities frequently seek
    to impose compulsory liability insurance for new
    risks

24
Climate change/natural catastrophes
  • Natural catastrophes are increasing all over the
    world creating unprecedented losses
  • Natural catastrophes in Europe (2003)
  • Loss or damage cause by floods 1 bn
  • Impact of drought 10 bn
  • More attention on prevention measures
  • Successful public-private partnerships have been
    developed

25
CEA Publications
Information on how to order on the CEA home
page www.cea.assur.org
26
CEA Executive Update
CEA Annual Report
Can be downloaded from the CEA home
page www.cea.assur.org
27
www.cea.assur.org
St. Petersburg, 27-29 May 2005
Write a Comment
User Comments (0)
About PowerShow.com