SOLVENCY II REVIEW 'MUST CORRECT EXCESSIVE CAPITAL BURDEN'

Reforms to Solvency II must correct excessive capital and operational burdens on insurers, Insurance Europe has said. Responding to the European Commission's Better Regulation consultation, the trade federation said although the proposals include a range of “helpful and necessary changes”, they also include elements that “would undermine the improvements and/or add avoidable costs”. The current Solvency II framework "does not correctly reflect insurers’ long-term business model", resulting in "excessive capital burdens and solvency volatility" for European insurers, the body said. It has also created "a very significant, and in some cases unnecessary", operational burden for insurers.