"We welcome the EC's acknowledgement of the need for an overall reduction in insurers' capital requirements. However, only a significant and permanent reduction of capital would allow insurers to increase their contribution to financing the recovery and supporting the EU's Green Deal and Capital Markets Union," Olav Jones, deputy director general of Insurance Europe said.

His statement came after the publication of the European Commission's proposals for the review of Solvency II. Jones further explained: "This is because insurers must take a long-term view in their strategy and investment decisions. In addition, a significant and permanent capital reduction would allow our industry to regain international competitiveness. This capital reduction can be achieved while maintaining very high levels of protection for European policyholders."

He also said that the steps that the EC has taken on proportionality seem positive, but there are, however, concerns that the EC's proposals for new reporting and group requirements include elements that would unnecessarily increase costs and complexity. There are also significant proposals relating to recovery and resolution and we will be looking at these carefully to assess the degree to which these proposals are necessary and are aligned with internationally agreed standards.

To conclude, Jones said: "We will continue to assess the EC's extensive set of proposals. However, the overall impact will only become clear when the EC clarifies its plans for Level 2."


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