Objectives of the session
In the wake of Brexit, insurers in the UK, have been asking for the Solvency II regulatory regime to be amended, blaming it for excessive regulatory capital requirements and restrictions on investable assets. However, the UK Prudential Regulation Authority, which supervises insurance undertakings, has been considerably more cautious on the file.
On the continent, the debate seems more balanced although some significant re-calibrations of the regime are envisaged, and its volatility will probably be further tempered. The revision of the framework will be an occasion to raise other issues such as the implications of the low interest rate environment, as well as the evolution of catastrophe products liabilities stemming from climate change. Their resolvability is also being strengthened.
More generally however, in the EU and globally the EU framework for insurance undertakings is considered as a complex one.
In this context, there is no doubt that the ongoing revision of the Solvency II regime will provide EU legislators with the occasion to clarify whether they consider that the general architecture of the framework as well as its calibration are fit for purpose. Legislators will have to determine whether the right trade-offs have been found between policyholder protection, financial stability, and the insurance sector’s ability to invest long-term.
Clarifying those issues will the objective of this session.
Points of discussion
- What are the main expected evolutions of the Solvency II framework and their respective added value? If we had to do it over again, would we do it similarly?
- Recovery and resolution: what are the main stakes and key features?