Proposals released to minimise the administrative burden on insurers...
Economic Secretary to the Treasury, Ed Balls, and FSA chief executive, John Tiner, have announced proposals for a step change in the approach to insurance supervision which aims to minimise the administrative burden on insurance groups operating in the EU.
The proposals are set out in a joint Treasury-FSA discussion paper on supervision of insurers where they are organised as a group with a parent and subsidiary companies. This issue is key to the proposed reforms of prudential regulation for the EU insurance sector (Solvency II), which the European Commission is considering.
The UK's proposals are an example of the Government's determination to achieve a proportionate and risk based approach to EU financial services rules and will contribute to the competitiveness of the insurance sector.
Balls said, "Today, we are publishing a consultation document on Solvency II setting out proposals for modernising the rules for European insurers. These proposals will allow insurers to work more efficiently across borders, while aligning our rules with global regulatory standards. We hope our proposals will stimulate debate on supervisory co-operation and convergence".
Tiner added, "This is an important proposal for developing a more efficient framework for the risk based supervision of insurance groups in Europe. This would encourage the development of better management of risk and use of capital by insurers and bring benefits for policyholders. We support this proposal as an initiative to reduce regulatory burdens through Solvency II by clarifying the roles of host and lead supervisors. We recognise that significant efforts will be required from governments and supervisors to build such a framework".
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