EUROPE - The widely-criticised Solvency II directive, an EU-initiated project aiming at creating a more risk-related solvency model, may not be adopted for pension funds after all, IPE has learnt (Including amended remarks in last paragraph).

The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS), the driving force behind the project, has set up a steering committee to deal with solvency issues for pension funds.

Klaas Knot, director of supervisory policy at the Dutch pension regulator DNB and newly-appointed to CEIOPS' managing, told IPE: "It is not being discussed that Solvency II, as such, will be applied to pension funds lock, stock and barrel."

Knot, who is leading the Solvency II portfolio for CEIOPS, added: "Moreover, there is a separate work stream within CEIOPS responsible for the solvency of pension funds."

Nonetheless, Knot argued a harmonised European framework for solvency demands is necessary for pension funds.

"The development of the regime for pension funds should be different from the regime for insurers," he said, explaining even though the same principles should lay at the heart of a solvency regime for both insurers and pension funds, a pension fund's risk profile and balance sheet is different from that of an insurer.

Aerdt Houben of the DNB will chair the working group, while Csaba Varga, the deputy director-general of the Hungarian Financial Supervisory Authority (PSZAF), is the managing board member who will have pension fund issues in his portfolio, Knot told IPE.

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