The European Insurance and Occupational Pensions Authority (EIOPA), on behalf of the European Commission, has just issued a highly technical 162 page consultation. Despite previous commitments, the detailed methodologies set out have largely been "cut and paste" from Solvency II for insurers, says the ACA.
Paul Kelly, Chairman of the ACA’s International Committee comments:
“This has led to a hideously complex set of calculations with little room for professional judgement. Indeed EIOPA seems to believe that there is indeed only a restricted role for actuaries in this process.
“The ACA, along with other industry bodies and individuals will contribute to the consultation (which finishes at the end of next month) but the following points are clear.
“This consultation is about a Quantitative Impact Study ("QIS") of the Commission's main proposals. It is certainly "Quantitative" but it only deals with the technical specifications for calculating the elements of the system - technical provisions, solvency margins etc. However, it claims that any assessment of the main "Impact" - i.e. how much extra cash companies will need to contribute - is out of scope and left to the Commission to determine.
“We believe that no QIS on the impact of Solvency II on UK pensions is in any way adequate without an assessment of how it impacts on the large slices of the British economy ultimately owned by our EU partners - particularly French and German multinationals.
“It is concerning that the rules view Greek and German State bonds as equally secure.
The ACA believes that the European authorities have shown a lack of understanding of the pension challenges in seeking to apply rigid EU rules to an area where professional input is vital.
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