Brussels (dpa) – Insurance companies in Europe have to prepare for higher capital requirements in the long term due to the persistently low interest rates.
On Wednesday, the EU Commission proposed a revision of the capital and supervisory regulations «Solvency II ” before. This involves a new calculation of the expected development of interest rates, which will result in changed obligations for the insurer in terms of own funds. Insurers should also take environmental risks into account in the future.
Since the situation on the financial markets has changed as a result of the low interest rates, higher risks may arise for insurers. Among other things, the proposed law is intended to ensure that insurers gradually hold more capital in order to actually be able to fulfill long-term promises such as life insurance to their customers.
While insurers have to put more aside in the long term, around 90 Billions of euros in capital will be released, said Economic Commissioner Valdis Dombrovskis. According to the Commission, this is due, among other things, to changes in the calculation of the risk margin. “The idea is to free up capital for insurers and allow them to increase their contribution as private investors to Europe’s recovery,” said Dombrovskis.
Overall, the proposed directive provides more flexible rules for lower-risk insurers . For this purpose, certain criteria are introduced, for example for insurance companies that make low-risk investments. In addition, a higher number of small insurers should be completely exempted from the highly complex «Solvency II» directive.
Climate change should be taken into account
The Commission wants through the proposal also highlight climate concerns in insurance. In future, insurers should consider risks from climate change in their risk analyzes. In addition, the European supervisory authority for the insurance industry (Eiopa) to 2023 should examine whether advantages for insurers with climate and environmentally friendly systems would be justified The proposal still leaves many questions unanswered, in particular the precise calculation of the future yield curve and the resulting capital requirements. “The exact design of these capital requirements is crucial for long-term products such as life insurance,” said GDV boss Jörg Asmussen. At the same time, Asmussen welcomed the relief for small insurers. However, he refused preferential treatment for green investments because they are not always risk-free.
MEP Markus Ferber (CSU) also urged caution when calculating capital requirements. “We have to be careful that we do not turn off the money tap in the insurance industry with too strict capital requirements,” said Ferber. Greens), however, the proposal did not go far enough. “The European insurance rules remain holey like Swiss cheese,” he said. He criticized the capital relief of 90 billion euros as a gift to the industry. In addition, there is a lack of harmonization of national insurance systems and European insurance supervision. “This is also at the expense of the protection of European consumers, who take out insurance products across borders but cannot rely on a uniform level of protection,” said Giegold.
The Commission also issued a directive on Wednesday for the settlement of insolvent insurers, which partially adapts the rules at EU level. The Brussels authority is responsible for legislative proposals in the European Union. These are then negotiated with the European Parliament and the Council of Member States and ultimately approved by them.