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Europe's insurers may get single supervisor-industry body
November 20, 2012 / 1:41 PM / 5 years ago

Europe's insurers may get single supervisor-industry body

* Insurance supervisor could mirror ECB role over banks

* Bank supervision changes more urgent than insurers’

* Politician touts Frankfurt as home for joint supervisor

By Jonathan Gould

FRANKFURT, Nov 20 (Reuters) - Europe’s insurers may get a single supervisor, mirroring a plan to centralise banking regulation under the European Central Bank, the head of the EU’s insurance rule-making body said on Tuesday.

“It will be very hard to have a single supervisory mechanism for banks and completely fragmented national supervision for the big insurance groups in Europe,” said Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA).

Keeping supervision as it is would create opportunities for arbitrage between regulatory systems as well as market distortions, he told the Euro Finance Week conference.

Establishing a single supervisor for banks was more urgent but the insurance sector needed to begin discussing a parallel path in the near future, Bernardino said.

“We have time to think about it, we don’t need to rush,” he said, declining to comment on whether his own organisation would take on the single supervisory role.

EU rules prevent the ECB from supervising insurance but some experts argue oversight of banks, insurance and markets could be combined at a European level as it is in many individual countries.

Before moving to a single supervisor, new risk capital rules for insurers, known as Solvency II, must be in place, which Bernardino said he expects to happen in 2016, after repeated delays.

Regulators at EIOPA and its European counterparts, the London-based European Banking Authority and the Paris-based European Securities and Markets Authority, are turning their attention more towards improving the consistency of supervision among national watchdogs, after an initial focus on developing common rules for EU countries.

The European Commission will examine next year whether the three authorities should be brought under one roof.

In the meantime, the German state of Hesse is pushing hard to bring any joint authority to Frankfurt, where EIOPA and the ECB are already based.

“We are very positive given the signals we’ve received but I don’t want to make any predictions,” Hesse’s Economy Minister Florian Rentsch said on the margins of the conference.

“It’s not an easy process in the European context,” Rentsch added. (Reporting by Jonathan Gould; Editing by David Cowell)

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