Two advocacy groups representing EU insurers and reinsurers have called on the European Commission to provide a “global level playing field” ahead of the monitoring period for the Insurance Capital Standard (ICS).
Insurance Europe and the Pan European Insurance Forum (PEIF) wrote a joint letter to the Commission’s Vice President, highlighting the industry’s views on the development of the new global standard, the second version of which is scheduled to be adopted in November 2019.
They stressed the need for an equal playing field for all internationally active insurance groups (IAIGs) and all participating jurisdictions, meaning all concerned jurisdictions should respect the commitments made in the Kuala Lumpur Agreement.
The letter also called for decisions on key aspects of the ICS to be made before the adoption of ICS 2.0 to ensure that convergence and agreement within the supervisory community is achievable.
The upcoming five year monitoring period is expected to identify potential flaws in the ICS and fix them as and where needed.
Additionally, Europe is engaged in the Solvency II 2020 review, which will consider a range of improvements to the regulation, in particular addressing flaws in the treatment of long-term business.
The work done on the Solvency II 2020 review should inform the contributions by the European national supervisory authorities and the European Insurance and Occupational Pensions Authority to the ICS project.
European stakeholders engaged in the ICS project will also attempt to ensure that the ICS does not create competitive disadvantages for Europe in comparison to other jurisdictions, or endanger the cost and availability of products valued by consumers.
They will also try to make sure the ICS does not threaten the ability of insurers to continue to invest in long-term economic growth, or create macroprudential and financial stability risks, including pro-cyclical investment behaviour.
