| Europe's insurance market still plagued by national regulations |
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| 20/06/2005 | |
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There is still much to do for doing away with insurance market barriers among European Member States. In a speech at the European Parliament, Stephen Haddrill, the Director general of the Association of British Insurers (ABI), called for a review of existing legislation by member state national regulators in order to create an efficient insurance marketplace. Stephen Haddrill, who has been at the helm of the ABI for now six weeks, was speaking in the name of British insurers, who write about 10% of new European premiums. Across Europe, life insurance premiums amounted to 507 billion euros in 2003 and non-life insurance premiums came to 347 billion euros. While praising the European Commission's last Green Paper about the insurance market, Stephen Haddrill questioned the motives behind the reluctance of many national Member States to tear down their own barriers toward a unified European insurance market. He singled out tax policies that actively discourage the cross-border transfer of savings and the requirement of a guaranteed rate of return on savings products by some member states, such as Sweden, Germany and Belgium. He also decried barriers such as residency requirements for actuaries or branch managers as well the obligation to provide the same financial information to various national supervisors in different formats. According to the ABI, those rules prevent European insurance policyholders from receiving the full benefit of insurance. Pressure "Apart from being difficult to justify, these restrictions have one other thing in common. For all of them, the solution lies in the hands of national Governments or regulators as well as the EU", said Stephen Haddrill. He called insurers to put pressure on national authorities to solve the problems that they themselves have created. "If member states are serious about creating a single market in insurance, they can make a good start by questioning their own regulations", he said. At the European level, he welcomed the European Commission's Corporate Governance Action Plan, which should benefit investors, among which the insurers. He said: "This rightly adopts a "comply or explain" approach, which reduces the need for intrusive regulation on the US model." He said that insurers, which also wear the asset manager's hat, are also looking forward to the next EC's Green Paper on financial markets in July, "in the expectation of a regulatory environment which allows a fair return, without excessive compliance burden." The Green Paper deals with policy at a European level. J.L. |
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