The profession is supported by regulators

After a month of whinging on a background of financial crisis, the European insurers tighten the ranks. To revive negotiations stalled, they today reaffirm their support for Solvency II, this directive must sink their capital requirements on the basis of an economic approach to the risk. Yet a week ago, some gave the project dead and buried. "Its decision pure and simple is not desirable," argue the insurers through their European Unions (CEA, CRO Forum and Amice).

The industry wants to get the message that it decided: despite its faults, Solvency II is still better than the current requirements of funds own, admittedly simple and robust, but most frankly adapted to the economic reality insurance. The profession is supported by regulators. The Committee of European insurance supervisors (CEIOPS) has also served on 28 October that "the current financial crisis revealed the appropriateness" of the new prudential approach. As the report of the project, it would be, said, very damaging. "Postpone the adoption of the directive, the time to do testing on the basis of degraded market conditions, would be dangerous and we would lose three or four years", summarizes a French insurer. It must be said that there is urgency. For a chance to enter into force in 2012, the text must be definitively adopted before the European elections in spring 2009.

Implying that the French Presidency of the Union reached, before the end of the year, to the 27 States members on compromise solutions. The subject, evacuated from the agenda of the Council of European Finance Ministers which was held on November 4 in Brussels, have therefore reinstated that of December 2.

Despite these declarations of intent, the fate of the text remains unclear. In practice, the financial crisis did not move one iota the political positions of each side. It has even more hardened, each therein what support his views ("Les Echos" of October 8).

Role of the framework directive

Hence the idea, now, push for the adoption of a minimum text. Without detracting from the main founding principles, it could evacuate some subjects that get angry "support group" scheme and pro-cyclicality in mind , then leaving a greater margin of discretion to the local supervisor. "To integrate the lessons of the crisis, we are compromising on harmonization that was supposed to convey the directive", admits an expert. Far strip the text to make it acceptable by the twenty-seven The positions are not be arrested. Refusing any amendment to the architecture of Solvency II", the CEIOPS considers that"lessons of the crisis"must be taken in the framework of implementation of the text.

French insurers, they want some lessons are reflected in the framework directive. According to our information, the profession has to present to the public authorities of amendments, to reduce pro-cyclicality of the prudential rules and to maintain political control of the implementing measures. Concerning in particular the calibration of the requirement of regulatory capital (VCC) and the minimum capital requirement (MCR), it is important that enforcement measures are not only in the hands of the European Commission and did not escape the political control of Governments and the European Parliament", argues the profession. Remains to know if the French Presidency of the Union will support these grievances.