EUROPE - The European Parliament Committee on Economic and Monetary Affairs (ECON) voted yesterday to agree the text of the Solvency II Directive, paving the way for the separation of the IORP and Solvency II legislative frameworks.
Peter Skinner, Solvency II's rapporteur of this draft legislation, told Global Pensions: "We are still waiting for the consultations from the Commission to see what kind of differences need to be included in the new IORP proposal, not inside the Solvency II framework.
"The Parliament gave a clear indication to keep the two separate through many who spoke and who put amendments forward."
Skinner added: "Insurance and pensions are different industry in many respects and I believe there are dangers in trying to drag pensions under the same regime.
"The consultation will apply only to the article 17 area which looks at those pensions which are insurance backed."
Skinner highlighted a number of important elements of the text passed yesterday, which will be discussed by the EU Parliament in the upcoming plenary session and which could in the future have some impacts on the pension industry.
They included the approval of a group supervision regime and of group support - transfer of funds at time of distress - which would allow local supervisors a key role working alongside group supervisors.
He explained group supervisors would still be able to have the final word, but great pressure would be put on them to make the decisions together with the local supervisors to avoid conflicts emerging.
In addition, he said the text would introduce a new element involving CEIOPS - the EU body of regulators for insurance - in a mediation role which will deliver a verdict on any dispute, forcing a group supervisor to "comply or explain".
A further important elements passed was a minimum capital requirement set at a realistic level and which allowed for the development of internal models which must be safe and reliable.
He concluded the text also introduced the recognition of the importance of financial stability and the need to avoid pro-cyclical effects.
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