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McCreevy: Solvency II needs more work

EUROPE - Charlie McCreevy, the European commissioner for internal markets and services, believes further work is needed before EU member states can commit themselves to the Solvency II regime.

In his closing speech at Tuesday's conference of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) in Frankfurt, McCreevy said: "It was agreed with Member States in 2006 that the issue of a possible extension of some aspects of Solvency II to pension funds would not be tackled directly under the Solvency II Proposal, but be examined in the context of a review of the [IORP] Directive in 2008."

He added CEIOPS has already begun examining the existing solvency rules for pension funds, while the commission will send a specific 'Call for Advice' to the committee early next year.

"It is only after having produced this fact-finding exercise that we will be able to better understand how solvency rules operate in the area of pension funds," he said, adding: "I believe that further work is needed here before we can commit ourselves to any specific regime."

In response, the European Federation of Retirement Provision (EFRP) voiced it strong concerns about the proposal for a Solvency II directive and the possible implications for institutions of occupational retirement provision (IORPs).

Wil Beckers, of the Dutch DSM pension services and chair of the EFRP working group shadowing the Solvency II initiative, said IORPs, subject to their own directive which was only fully implemented in July this year, are not need of a review of their prudential framework along with the insurers.

The federation believes the directive already contains most of the principles now proposed for insurers under Solvency II: "The three pillar structure of Solvency II may be non-apparent, but it surely is there and only needs to be uncovered," said Beckers.

Moreover, the federation presented a study on EFRP members' vision on the IORP directive today, warning a review of the directive next year would be much too soon, mainly because of its delayed implementation.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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