Consultation response on the review of prudential rules for insurance and reinsurance firms (Solvency II Directive)

13 January 2022

Consultation response

On 10 January 2022, Finance Watch published its response to the European Commission’s consultation on the review of the insurance sector’s prudential regulation (Solvency II Directive).

The proposals feature a major inconsistency with respect to addressing systemic risk. On the one hand, they recognise the systemic nature of the sector by introducing, in a most welcome move, a directive establishing a framework for the recovery and resolution of insurance and reinsurance companies. At the same time, they fail to impactfully address the insurance industry’s climate-change related risks, which pose a major threat to financial stability. The proposals also lack ambition regarding macroprudential tools in the insurance sector.

Read the full response