ITALY – The president of pension regulator Covip said he was satisfied the agency will be given back full power of supervision on pension-related investments in spite of late legislation.
Covip’s president, Luigi Schimia, spoke to IPE of his views on the political debacle about the supervisor’s future and its core role in the development of the Italian pension industry.
The pension regulator has been in the media spot light in recent weeks because of the so called transparency bill, currently being considered by the Senate, which would redefine its role.
The bill, already passed by the lower chamber of Parliament, has been prepared to protect investments by introducing higher standards of transparency, but has stripped Covip of its role of insurance supervisor, transferring it to stock market regulator, Consob.
As such the bill clashes with the pension reforms passed last July, which made Covip sole pension industry supervisor. Schimia has embarked in a campaign to have Covip’s role acknowledged and has been backed so far by politicians like welfare minister Roberto Maroni, the architect of the pension reform and social partners.
Welfare under-secretary Alberto Brambilla is the latest politician to throw his weight into Covip’s cause. He said earlier this week that the government had the necessary changes to the transparency bill ready. The senate has two more weeks to present amendments to the bill.
Brambilla made this announcement at a conference also attended by Schimia, who was key-note speaker. The Covip head said that at the same conference Economy and Finance vice-minister Giuseppe Vegas, has also assured that the government was satisfied of Covip’s right to supervise pension transactions.
Schmia said that a consensus is forming and added Covip was grateful to Maroni for his public backing.“ We draw strength and confidence from such solid, all-around support” Schimia said, “ I am reassured”
“This is a market of about eight to €10bn a year” Schima said ”Pension investments should guarantee an income when a worker is no longer able to work for it. It is a vital social function and should not be treated as any other form of investment.”
Schimia explained that as well as some supervision authority, the bill would also lose Covip the power to monitor management contracts between pension funds and managers to make sure the pension fund is fully aware of the risks involved.
“ If we Covip are supposed to supervise the pension sphere, it is primarily about monitoring stability, and what better way would we have than checking the relationship between manager and pension fund?” Schimia observed.
“We must keep at all costs this monitoring power ” he told IPE. Covip has been recently summoned to the senate together with insurance regulator Isvap to put their cases to the chamber.
In the meantime, ANIA, the insurers association has put out an statement to the effect that Covip should be granted supervision over pensions.