The European Parliament has voted its approval of new laws and regulations, which now need to be approved by EU member governments, for the regulation of the reinsurance industry within the 25-member block.
The proposed legislation, known as the “Reinsurance Directive,” would establish standardized regulation for all reinsurers operating in EU countries. Current legislation does not adequately cover the reinsurance industry. As a result numerous different levels of supervision co-exist in the different EU countries.
Adoption of the Directive would “open up EU countries to competition both through the ‘passporting’ provisions, enabling reinsurers located in one Member State to operate anywhere in the EU, and also through the abolition of collateral requirements in certain Member States,” noted Ireland’s Dublin International Insurance Marketing Association (DIMA).
The organization indicated that that the vote to approve the proposed Reinsurance Directive, “will create a standard level of supervision and enable European reinsurers to operate across the EU. DIMA and its member companies have fully supported the move to full reinsurance regulation in Europe, and have worked closely with the relevant Irish authorities to promote the Directive,” it continued. “It is likely that Ireland will see an early adoption into local legislation, in advance of the two year ‘transposition’ period allowed in the Directive.”
DIMA CEO Sarah Goddard commented: “This vote signals a new and exciting era for the reinsurance market operating in Ireland. Over recent years, Dublin has become a major centre for reinsurance business, and Ireland is now one of the few net ‘exporters’ of reinsurance in the European Union. By adopting the provisions of the Directive early, Ireland is sending out a clear message that it champions the cause of prudent regulation. To this end, the market is working closely with IFSRA, the regulator, to develop a regulatory framework that embodies both the Reinsurance Directive and international standards of supervision.”
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