European insurers call for protection of competition and risk-oriented regulation
The Pan European Insurance Forum (PEIF) has spoken out in favour of carefully balanced regulatory consequences to the financial crisis. The key demands and proposals by PEIF, a group of CEOs from leading European insurance undertakings, are outlined in a discussion paper entitled "Insurance View: Regulatory Consequences of Financial Crisis".
Following initial reactions by politicians, insurers are pushing for a balanced reform of regulatory framework conditions in the financial sector. Future regulation of financial services providers should be more closely geared to risks and reward good risk management, as provided for by the European Commission’s Solvency II draft directive for the insurance industry. Regulatory systems should be adapted to the increasing internationalisation of companies, large undertakings being more efficiently overseen by means of group supervision instead of by many national authorities.
Insurers are also calling for more transparency, especially in connection with structured finance products. These had substantially exacerbated the financial crisis, mainly because dealers and buyers alike no longer had any clear idea of the risks they contained.
PEIF members regard the measures deployed by the state to combat the financial crisis as a threat to competition. It is important to ensure that sweeping government support does not distort competition by giving preferential treatment to individual companies or specific branches of industry. The measures therefore have to be in harmony with European competition rules, limited in time, and contain clear exit rules.
"Stakeholders reacting to the financial crisis need to take into account that the business model of the insurance industry differs substantially from that of the other financial services providers", said Henri de Castries, AXA CEO and PEIF Chairman. He added that "insurers do not generate the kind of systemic risk that arises in banking".
Members of the PEIF insurance forum are committed to restoring confidence in the financial sector and to designing a sound and stable financial system. They therefore strongly welcome the ongoing debate to redefine the regulatory and supervisory model of the EU financial sector.
Munich, 24 February 2009
Pan European Insurance Forum
The Pan-European Insurance Forum (PEIF) is a group of CEOs of major insurance companies in Europe, consisting of AEGON, Allianz, AVIVA, AXA, GENERALI, ING, MAPFRE, Munich Re, RSA, Swiss Re, UNIQA and ZURICH Financial Services.
The Presidency of the PEIF rotates every two years. The PEIF is currently chaired by AXA. PEIF members strive for a strongly competitive and fully integrated European insurance market.
This paper is supported by the following members of the PEIF:
- Mr. Sergio Balbinot – Managing Director – Assicurazioni Generali S.p.A
- Mr. Henri de Castries – Chief Executive Officer, Chairman of the Management Board – AXA Group
- Mr. Michael Diekmann – Chairman of the Board of Management – Allianz SE
- Mr. Andrew Haste – Group Chief Executive – RSA Insurance Group plc
- Dr. Konstantin Klien – Chief Executive Officer and Chairman – UNIQA Versicherungen AG
- Dr. Stefan Lippe – Chief Executive Officer – Swiss Re
- Mr. José Manuel Martinez – Chairman and Chief Executive Officer – MAPFRE
- Mr. Andrew Moss – Chief Executive Officer – AVIVA plc
- Mr. James J. Schiro – Chief Executive Officer – Zurich Financial Services
- Dr. Nikolaus von Bomhard – Chairman of the Board of Management – Münchener Ruckversicherungs-Gesellschaft
- Mr. Alex Wynaendts – Chairman of the Executive Board – AEGON N.V.
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