A key part of the new Solvency II regime, due to come into force in 2012, looks set to be removed or watered down following a recent meeting of the EU’s Economic and Financial Affairs Council (Ecofin). The group supervision and group support proposals approved by the European Parliament would allow assessment of capital and risk across an insurance group and increased co-ordination of the relevant supervisors. However, these provisions were removed from the draft text that was approved by Ecofin.
Ecofin, the European Parliament and the European Commission must now agree a final text and many stakeholders will lobby for the group supervision provisions to be reintroduced, although it may be the group supervision provisions will need to be amended in order to reach consensus and meet the timetable for implementation by 2012.
