In its response to the European Commission’s consultation, Insurance Europe has welcomed the recognition in the EC Green Paper on the long-term financing of the European economy that regulatory and framework changes — including changes in prudential regulation, accounting rules and tax law — could threaten insurers’ ability to continue providing long-term funding to the economy.
“Policymakers should not only promote the development of long-term savings, but also create an environment of trust and stability for those willing to invest in long-term products,” said Insurance Europe director general Michaela Koller
“The consequences of individual regulations, as well as their cumulative impact, need to be assessed so that the wide array of regulatory initiatives do not result in adverse consequences for insurers’ role as long-term investors and, in turn, for the wider economy.”
Providing long-term funding is not insurers’ primary role, but a consequence of their function as providers of protection and pension products, which leads them to collect premiums that are invested in appropriate financial assets. Insurers are the largest institutional investor in Europe, with an estimated €8.5trn of assets under management in 2012.
Insurance Europe strongly believes that the impact of regulatory initiatives should not be assessed on an isolated basis, but rather cumulative impact studies within and across sectors should be conducted. A recent Insurance Europe/Oliver Wyman study on the role of insurers as institutional investors identifies certain regulatory initiatives that could unintentionally harm insurers’ long-term investing, such as aspects of the forthcoming Solvency II regulatory regime’s capital requirements, the proposed financial transaction tax and reforms of over-the-counter derivatives trading.
|
