Key Positions


The overriding goal of insurance supervision is to assure that insurers can actually permanently fulfill their obligations. Consumers thus profit from effective supervision. However, the insurance industry is itself also interested in strong supervision, as this assures that all insurance companies face the same competitive for conditions and that nobody can procure (short-term) advantages by not complying with regulations. In addition, the insurance industry is dependent on confidence in the industry and effective supervision strengthens this confidence.

Financial supervision in europe and Germany has been reorganised as a consequence of the banking and financial market crisis. Further changes have already been decided, e.g. the installation of a European supervisory banking authority at the ECB. Even though the insurance industry is not the focus of the reform measures, significant changes have nonetheless arisen for the industry. In 2011, the new european supervisory authority EIOPA was created, and national financial supervision was reformed last year.


On an international level, the International Association of Insurance supervisors (IAIS) is endeavoring to react to the increasing globalisation in the insurance sector by developing a “Common Framework for the supervision of Internationally Active Insurance Groups” (ComFrame). The objective is to reach a framework agreement promoting close cooperation by supervisory authorities in the oversight of international insurance groups, thus closing regulatory gaps. The German insurance industry welcomes and supports this process.

At the same time, the IAIS is also trying to identify systemically important insurance companies in order to subject them to special regulation. This has to be strictly and formally separated in conceptual terms from the ComFrame process, because not every international insurance group is automatically systemically important. In addition, classic insurance activities do not represent a risk to the financial market as a whole. Insurers are only “systemically important” if they carry out a significant scope of non-traditional business activities which have the potential to destabilise the financial markets and the economy. This reasoning is also shared among international insurance supervisors.

Insurance supervision has proven to be successful during the financial market crisis. The major goal of the German insurance industry with respect to the reorganisation of supervision is therefore that the reform of banking supervision does not impair the functionality, quality or standing of insurance supervision. In light of the international importance of Germany as an insurance market, independent insurance supervision must be preserved.

An growing problem for insurance companies is the escalating number of requests for reports by the various supervisory authorities. Reporting requirement for undertakings have been established through the new supervisory requirements in Solvency II. Moreover, the recently discussed new reporting channels will increase reporting burden even more.

Our Positions
Ensure one single reporting channel
Effective supervision requires information on insurance companies. For companies, however, reporting requirements can become a bureaucratic burden if the amount of reporting is over proportional increasing and when different authorities install independent reporting channels. The same information then has to be processed in various ways and transmitted several times. German insurers should therefore have only one single reporting channel to the Federal Financial supervisory Authority. If other authorities, such as the ECB, the Bundesbank or the ESRB, require data from the insurance industry for their purposes, the Federal Financial Supervisory Authority can provide corresponding figures.
No supervision of financial conglomerates by the ECB and Bundesbank
The Lisbon Treaty expressly precludes any transfer of insurance supervision to the ECB. The ECB does not have the required expertise to supervise insurance companies. The integration of the ECB and/or the Bundesbank into insurance supervision is not preferable because target conflicts in supervisory law between credit institutes and insurance companies will occur and most likely be resolved at the expense of insurers. Therefore, the ECB and Bundesbank should not exercise any supervision over insurers, not even indirectly via the supervision of financial conglomerates. such supervision would also lead to conflicts with the actually competent insurance supervisory authorities.
European insurance supervisory authorities should focus on their core responsibilities
It is becoming clear that EIOPA interprets its scope of responsibilities very broadly. This is evident inter alia in the various guidelines planned by EIOPA, The European Commission, Council and European Parliament are not to be involved in these procedures. The possibility to oppose against EIOPA guidelines through the courts is not clearly regulated. EIOPA should focus on the core competencies defined in the EIOPA regulation, particularly Solvency II.
Recognise the insurance business as being free of systemic risk
The core business of insurance companies entails no systemically important risks for the financial market. The International Association of Insurance supervisors (IAIS) also holds this view. However, the IAIS has not yet implemented this view consistently enough in its proposals for the identification of systemically important insurers (G-SIIs). This also applies to the catalogue of measures proposed by the IAIS for supervision of G-SIIs, which provides for strict regulation in the areas of supervision, resolution and capital requirements. The concept presented by the supervisors lacks a comprehensible and acceptable definition of systemically important business activities. As a result, key aspects of core business, which are free of systemic risks, become the subject of increased supervision.
Supervise international groups using common principles
ComFrame should not be designed as an additional regulatory level. It should instead be viewed as a principle-based standard for the necessary adaptation of national and regional supervisory regulations. The provisions for the supervision of groups under Sol- vency II should serve as a general model in this regard. Moreover, ComFrame should be introduced gradually, with the focus on a more efficient collaboration among the supervisors involved as a first step.