Dröse urges greater market cooperation on Solvency II lobbying effort

Mr Dröse also told Commercial Risk Europe that the commission, the European Insurance and Occupational Pensions Authority (EIOPA) and the insurance market must also remember that Solvency II was created to enhance the position of buyers of insurance as they enter the final negotiations on the new rulebook. The lobbying effort on Solvency II has inevitably become quite competitive as each part of the market has its own representative groups that seek to influence the decision-making for their own benefit. This has been made more complex and taxing for EIOPA and the commission because the rules cover all parts of the market, both life and non-life. ECIROA itself was formed to champion the case of Europe’s captive owners and boasts many of Europe’s leading companies within its membership. hideMr Dröse and his colleagues have worked hard with captive experts and other representative groups such as FERMA to try and gain more clarity on how captives will be affected by the new rules. The group’s latest effort was the publication of a paper on how the principle of proportionality could be applied, which it hopes will be discussed with EIOPA and Karel Van Hulle, the man at the commission responsible for Solvency II, shortly. ECIROA has also carried out its own detailed analysis of the impact of QIS5, the latest assessment of the impact of Solvency II carried out by EIOPA, and hopes to discuss its implications for captives, particularly in relation to risk weightings. Mr Dröse told CRE that he believes the job of EIOPA and the commission is being made harder for them than need be because of an increasing tendency among interest groups and individual insurance and reinsurance companies to bang their own drums too loudly. “I feel that some companies and groups are making life harder for the commission because they are fighting each other, not least the big companies and smaller companies. They all have their own explanations for how things need to be done to benefit their own company or group. What we really need is market solutions that take care of all the parties involved with the aim of improving the situation for the customers of insurers,” explained Mr Dröse. “The EC said that this [Solvency II] was done for the protection of the insured but perhaps some have lost sight of this. This leads to some strange conclusions that lead to overly strong weighting in some key areas such as counterparty protection and weightings for asset risks. This leads to contradictory results that do not necessarily lead to a better situation for customers,” continued Mr Dröse. To help get the process back on track Mr Dröse suggested that EIOPA and the commission could hold a series of focused meetings with all interested parties perhaps over an intensive week rather than trying to deal with all the lobbyists on a piecemeal basis. As with many other experts in the European insurance market Mr Dröse also fears that time is running out for EIOPA and the commission as they attempt to meet the January 2013 implementation deadline. “Basle II/III was not designed to cover the entire banking market and it took seven or eight years to introduce. Solvency II covers the entire market and they are trying to introduce it in five years. So they have a shorter timescale and a bigger volume of work which is tough,” said Mr Dröse.

Dröse urges greater market cooperation on Solvency II lobbying effort

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