A discussion paper on the UK’s proposals to reduce the administrative burden on insurance groups operating in the EU was launched on the 22 April 2008 by the Treasury and the FSA. (See: Discussion Paper) As has previously been discussed in a recent blog, the FSA has recognised the need for further development of the existing arrangements for regulatory cooperation and endorses the idea of cooperation among regulators and the creation of supervisor colleges. (See: UK: Regulatory: The FSA Calls for Increased Co-Operation in Europe.)

The proposals detailed in the discussion paper aim to encourage more effective group supervision across EU insurers and provide better value for consumers. They represent the UK’s contribution to the development of regulation of the EU insurance sector through the Solvency II process.

A key focus of the discussion paper is the proposal put forward by the Chancellor of the Exchequer, Alistair Darling, for the creation of colleges of supervisors targeted at improving dialogue between EU regulators. The UK Government has proposed that these colleges would operate for all significant EU cross-border financial institutions, irrespective of legal form, providing a structure for the sharing of information and the cooperation of supervisory authorities in the EU.

These proposals are an example of the Government’s resolve to continue in its proportionate and risk based approach to EU financial services rules that will contribute to the competitiveness and modernisation of the insurance sector.