German insurers lambast Europe for regulatory burden
Heavy reporting requirements on insurers is counterproductive, the GDV says
German insurers have called on the next European Commission to ease off introducing new financial regulations after counting 77 pieces of legislation affecting the sector in Europe’s last legislative period.
German insurance association GDV said the amount of regulation for insurers has increased, particularly at EU level, and it wants the next administration “not to burden” the financial sector with more rules. It further criticised the Corporate Sustainability Reporting Directive (CSRD) for producing “bloated reports” and called for Solvency and Financial Condition Reports required under Solvency II to be abolished.
“The report is unsuitable for consumers due to its length and level of detail… Instead, companies should be required to publish their solvency ratio on the company website,” proposed Christoph Jurecka, member of the GDV executive board and CFO at Munich Re, alongside other measures to simplify regulations.
“In the last legislative period, the EU Parliament, Council and EU Commission launched 77 legal acts in the area of financial and sales regulation that affect us as an industry,” Jurecka said, amounting to 10,000 pages of text. Additional rules issued by the European Insurance and Occupational Safety Authority (EIOPA) add a further 55 sets of requirements, the GDV said.
Jurecka said an explosion of reporting and disclosure requirements is “counterproductive” to key regulatory objectives, such as consumer protection, and makes it more difficult for new companies to enter the market and boost competition for buyers.
Jurecka said the German government’s estimated costs of implementing the CSRD, at €1.4bn per year for more than 13,000 German companies, is “probably too low”.
At the same time, regulation has also increased in Germany, particular tax laws.
The GDV said more should be done to co-ordinate rules at national, European and international levels.
“Where a European set of rules is introduced, existing national rules can be dismantled,” argued Jörg Asmussen, general manager of the GDV.
But he welcomed the further integration of the capital markets union, which Asmussen said will increase competitiveness and resilience in Europe and reduce fragmentation in Europe’s financial markets.
“In order to further develop the capital markets union, national interests must be set aside in favour of a larger European idea,” Asmussen urged. He further proposed a European investment court or ombudsman to resolve cross-border investment disputes as part of Europe’s progress on the capital markets union.
