Insurance Group Supervision in the European Union

  • Angelo Borselli
Chapter

Abstract

This chapter examines the supervision of insurance groups in the European Union (EU), highlighting the evolution from the Insurance Groups Directive to the Solvency II Directive. Solvency II deviated from supplementary supervision, turning to a system of consolidated supervision that rests on the concept of the insurance group as a single economic entity rather than a collection of entities. The chapter discusses the changes made by Solvency II and argues that the system is based on a clear and appropriate allocation and division of responsibilities between the group supervisor and the other supervisory authorities, to the benefit of enhanced accountability in the exercise of group supervision. The concentration of powers and responsibilities in the group supervisor is conducive to both more efficient and effective group supervision. Further centralization of supervisory responsibilities for the oversight of systemically significant insurance groups, however, would be sensible. The chapter suggests the prospect of the centralization at the EU level of the supervision of groups that are systemically risky as the next step of the evolutionary process of insurance group oversight.

Keywords

Insurance group supervision Solvency II 

References

  1. Alves, I., et al. (2015). Network analysis of the EU insurance sector. ESRB Occasional Paper. Retrieved from https://www.esrb.europa.eu/pub/pdf/occasional/20150713_occasional_paper_7.pdf?8b5ea67294b554c96d795d821f572b7f
  2. Borselli, A. (2012). Keeping watch on giants: The supervision of insurance groups and of insurance undertakings within financial conglomerates in European law. European Insurance Law Review, 3, 26–47.Google Scholar
  3. Borselli, A. (2014). The supervision of insurance groups’ system of governance under Solvency II. In S. Jovanovic et al. (Eds.), Modern insurance law: Current trends and issues (pp. 44–59). AIDA Serbia: Belgrade.Google Scholar
  4. CEIOPS. (2005a). Recommendation on possible need for amendments to the Insurance Groups Directive. Retrieved from https://eiopa.europa.eu/fileadmin/tx_dam/files/consultations/consultationpapers/DOC0504.pdf
  5. CEIOPS. (2005b). Guidelines for coordination committees in the context of supplementary supervision as defined by the Insurance Groups Directive (98/78/EC). Retrieved from https://eiopa.europa.eu/fileadmin/tx_dam/files/Colleges/11.pdf
  6. CEIOPS. (2010). List of groups for which a college of supervisors is in place. Retrieved from https://eiopa.europa.eu/fileadmin/tx_dam/files/Colleges/6.pdf
  7. Center for European Policy Studies. (2006). The future of insurance regulation and supervision in the EU. New developments, new challenges. Brussels.Google Scholar
  8. Commission of the European Communities. (1995). Proposal for a European Parliament and Council Directive on the supplementary supervision of insurance undertakings in an insurance group. Retrieved from http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:1995:0406:FIN:EN:PDF
  9. Darlap, P., & Mayrm, B. (2006). Group aspects of regulatory reform in the insurance sector. The Geneva Papers, 31, 96–123.Google Scholar
  10. EIOPA. (2013). Guidelines on system of governance. Retrieved from https://eiopa.europa.eu/GuidelinesSII/EIOPA-BoS-14-253_GL%20on%20system%20of%20governance.pdf
  11. European Systemic Risk Board. (2015). Report on systemic risks in the EU insurance sector. Retrieved from https://www.esrb.europa.eu/pub/pdf/other/2015-12-16-esrb_report_systemic_risks_EU_insurance_sector.en.pdf
  12. Ferran, E. (2012a). Understanding the new institutional architecture of EU financial market supervision. In E. Wymeersch, K. J. Hopt, & G. Ferrarini (Eds.), Financial regulation and supervision. A post-crisis analysis (pp. 111–158). Oxford: Oxford University Press.CrossRefGoogle Scholar
  13. Ferran, E. (2012b). Crisis-driven regulatory reform: Where in the world is the EU going? In E. Ferran, N. Moloney, J. G. Hill, & J. C. Coffee Jr. (Eds.), The regulatory aftermath of the global financial crisis (pp. 1–110). Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  14. Finney, C. (2016). Systemic risk in insurance: Common thinking errors, and their resolution. In A. Georgosouli & M. Goldby (Eds.), Systemic risk and the future of insurance regulation (pp. 32–50). New York: Informa Law.Google Scholar
  15. FSB. (2016). 2016 list of global systemically important insurers (G-SIIs). Retrieved from http://www.fsb.org/wp-content/uploads/2016-list-of-global-systemically-important-insurers-G-SIIs.pdf
  16. Helsinki Protocol. (2000). Protocol relating to the collaboration of the supervisory authorities of the member states of the European Union with regard to the application of Directive 98/78/EC on the supplementary supervision of insurance undertakings in an insurance group, 11 May 2000. Retrieved from https://eiopa.europa.eu/fileadmin/tx_dam/files/Colleges/14.pdf
  17. Houben, A., & Teunissen, M. (2011). The systemicness of insurance companies: Cross-border aspects and policy implications. In P. M. Liedtke & J. Monkiewicz (Eds.), The future of insurance regulation and supervision. A global perspective (pp. 246–269). New York: Palgrave Macmillan.Google Scholar
  18. IAIS. (2009). Issues paper on group-wide solvency assessment and supervision. Retrieved from http://www.iaisweb.org/page/supervisory-material/issues-papers//file/34278/issues-paper-on-group-wide-solvency-assessment-and-supervision
  19. IAIS. (2014). Common framework for the supervision of internationally active insurance groups. Revised draft. Retrieved from http://www.iaisweb.org/page/supervisory-material/common-framework
  20. IAIS. (2015). Insurance core principles. Retrieved from http://www.iaisweb.org/page/supervisory-material/insurance-core-principles
  21. KPMG. (2012). Solvency II and insurance groups: Making it real for the business. Retrieved from http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/Documents/SII-Making-it-real-for-the-business.pdf
  22. Mächler, M. (2011). Insurance group supervision: Addressing the emergence of adverse network dynamics. In P. M. Liedtke & J. Monkiewicz (Eds.), The future of insurance regulation and supervision. A global perspective (pp. 149–161). New York: Palgrave Macmillan.Google Scholar
  23. Manghetti, G. (2006). Multinational insurance groups: The main problems for supervisors. The Geneva Papers on Risk and Insurance, 27, 310–319.CrossRefGoogle Scholar
  24. Masciandaro, D., & Quintyn, M. (2011). The architecture of insurance supervision before and after the financial crisis. In P. M. Liedtke & J. Monkiewicz (Eds.), The future of insurance regulation and supervision. A global perspective (pp. 109–128). New York: Palgrave Macmillan.Google Scholar
  25. McCoy, P. (2015). Systemic risk oversight and the shifting balance of state and federal authority over insurance. UC Irvine Law Review, 5, 1389–1441.Google Scholar
  26. OECD.Stat (2016). Insurance indicators. Retrieved from http://stats.oecd.org/Index.aspx?DatasetCode=INSIND
  27. Outreville, J. F. (2008). Foreign affiliates of the largest insurance groups: Location-specific advantages. The Journal of Risk and Insurance, 75, 463–491.CrossRefGoogle Scholar
  28. Sangiorgio, G. (1996). Il gruppo assicurativo nell’esperienza dell’ISVAP. In P. Balzarini, G. Carcano, & G. Mucciarelli (Eds.), I gruppi di società, Atti del convegno internazionale di studi, Venezia, 16–18 novembre 1995, Rivista delle società (Vol. 1, pp. 535–552). Milano: Giuffrè.Google Scholar
  29. Schoenmaker, D. (2013). Post-crisis reversal in banking and insurance integration: An empirical survey. Economic Papers 496/2013. European Commission. Retrieved from http://ec.europa.eu/economy_finance/publications/economic_paper/2013/pdf/ecp496_en.pdf
  30. Schwarcz, D. (2015). A critical take on group regulation of insurers in the United States. UC Irvine Law Review, 5, 537–558.Google Scholar
  31. Schwarcz, D., & Schwarcz, S. L. (2016). Anticipating new sources of systemic risk in insurance. In A. Georgosouli & M. Goldby (Eds.), Systemic risk and the future of insurance regulation (pp. 51–64). New York: Informa Law.Google Scholar
  32. Van Hulle, K. (2011). Regulatory challenges and developments in the European Union. In P. M. Liedtke & J. Monkiewicz (Eds.), The future of insurance regulation and supervision. A global perspective (pp. 294–320). New York: Palgrave Macmillan.Google Scholar

Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Angelo Borselli
    • 1
    • 2
  1. 1.Department of LawBocconi UniversityMilanItaly
  2. 2.University of Connecticut School of LawHartfordUSA

Personalised recommendations