Insurance Europe Raises Concerns on Draft EIOPA Supervisory Statement on Third Country Reinsurance

In your answer to a formal consultation, Insurance Europe has expressed “serious concerns” on the draft EIOPA Supervisory Statement in relation to reinsurance concluded with third country companies. According to this entity, these questions They are argued as follows:

Clarity of objectives, scope and nature of the document

Insurance Europe points out that it is not clear What problem are you trying to address? EIOPA. The federation further maintains that “the choice of a Declaration is disproportionate and excessiveand that it would be more appropriate to use an alternative tool, such as a supervision manual.

Legal framework and interaction

The Declaration, adds Insurance Europe, imposes conservative expectations and additional burdens to competent national authorities as well as reinsurers, which could discourage the use of third country reinsurance capacity. What is worrying, in the opinion of Insurance Europe, is that the draft Declaration basically bypasses the Solvency II framework, including equivalence decisions of the European Commission. Insurance Europe asks that the Declaration clarify its relationship to these equivalence decisions and not override them. This includes recognizing distinctions between equivalent and non-equivalent jurisdictions.

Importance of competitiveness in reinsurance

In its response, Insurance Europe reiterates the importance of open reinsurance markets to support competition and keep prices low. The industry also warns of the risk of reciprocity from other jurisdictions, should non-EU reinsurers’ market access be restricted, which could make EU reinsurance less attractive abroad. Highlight the benefits of cross-border reinsurance

Insurance Europe calls for a review of the Declaration and Impact evaluation to highlight the importance of global market access, including achievements such as equivalence decisions.

Consistency and clarity of focus

Finally, Insurance Europe asks coherence in EIOPA’s approach to reinsurance. EIOPA itself identified reinsurance as a crucial element in addressing the insurance protection gap, but the Declaration on Third Country Reinsurance sends a different (and potentially contradictory) message about reinsurance. The reinsurance cross-border and access to global capital play a key role in addressing the protection gap, and this must be reflected in the Declaration.