Treasury And FSA Launch Consultation On EU Insurance Sector

by Amanda Banks, for LawAndTax-News.com

22 April 2008

A discussion paper on the UK's proposals to reduce the administrative burden on insurance groups operating in the EU was launched on Tuesday by the Treasury and the Financial Services Authority (FSA).

The proposals aim to encourage more effective group supervision across EU insurers, and ultimately provide better value for consumers.

They represent the UK's contribution to the development of prudential regulation of the EU insurance sector through the Solvency II process.

A key focus of the discussion paper is proposals put forward by the Chancellor of the Exchequer for the creation of colleges of supervisors.

Under these proposals, EU regulators would work more closely through supervisory colleges, improving the effectiveness and efficiency of their supervision of cross-border insurance and reinsurance groups.

The UK Government has proposed that these colleges would operate for all significant EU cross-border financial institutions, irrespective of legal form, providing a structure for the sharing of information and the cooperation of supervisory authorities in the EU.

According to the Treasury:

"The proposals are an example of the Government's determination to continue in its proportionate and risk based approach to EU financial services rules that will contribute to the competitiveness and modernisation of the insurance sector, in turn bringing benefits to consumers throughout the EU with more innovative and better value insurance products."

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