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Cross-border insurance in Europe

The cross-border insurance sector is becoming increasingly strong in Europe. This event looks at the current cooporation between national insurance su


Olav Jones

Deputy Director General, Director Economics & Finance, Insurance Europe,



Gabriel Bernardino’s keynote speech focused on the present and future of regulation and supervision of the European insurance sector. His overall assessment was that while regulation is becoming more harmonized, especially with the implementation of the Solvency II Directive, supervision of the insurance sector remains fragmented. In order to move towards centralized, European supervision, an “Insurance Union”, Bernardino emphasized that the macroprudential framework the Directive introduced needs to be completed and a recovery and resolution pillar must be developed. From an operational perspective, he outlined two concrete steps that need to be taken: more powers for EIOPA to pursue supervisory convergence and a clear mandate to oversee internal models, on a comply-or-explain basis.

Dirk Schoenmaker made the case for centralized supervision, by means of comparing the insurance industry to the banking one. He underlined that insurance is a more global and cross-border business than banking, which takes place relatively more often through subsidiaries. While this means that assets are available at the local level and that national legislation applies, risk management is happening at the central level and coordination between authorities will not work in a crisis situation. Schoenmaker, therefore, argued for an Insurance Union over cooperation between national authorities. He added that this would not require a change in the Treaty. Schoenmaker emphasized that common supervision should take place at the European Union and not the euro area level, since it relates to the internal market and not the common currency.

Olav Jones also compared insurance to banking but arrived at different conclusions. While he spoke in favour of cooperation and supported Solvency II, he saw no urgency for a common supervisor to manage insurance groups. Jones argued that generally, compared to banking, problems in the insurance business do not spread as easily within the group, crisis management does not require as quick a response and risk tends to be lower with size and cross-border presence of the group. He added also that, unlike banking, insurance is not fundamentally pro-cyclical and the discussion of pro-cyclicality is generated by the underlying measurement in the regulatory framework. Thus, Jones concluded that discussion of common supervision is premature: gaps should be identified while Solvency II is implemented and a cost-benefit analysis of common supervision must follow.

Notes by Konstantinos Efstathiou 


Event materials

Presentation Dirk Schoenmaker