Insurance Group Supervision in the European Union

Abstract

This chapter examines the supervision of insurance groups in the European Union (EU), highlighting the evolution from the Insurance Groups Directive to the Solvency II Directive. Solvency II deviated from supplementary supervision, turning to a system of consolidated supervision that rests on the concept of the insurance group as a single economic entity rather than a collection of entities. The chapter discusses the changes made by Solvency II and argues that the system is based on a clear and appropriate allocation and division of responsibilities between the group supervisor and the other supervisory authorities, to the benefit of enhanced accountability in the exercise of group supervision. The concentration of powers and responsibilities in the group supervisor is conducive to both more efficient and effective group supervision. Further centralization of supervisory responsibilities for the oversight of systemically significant insurance groups, however, would be sensible. The chapter suggests the prospect of the centralization at the EU level of the supervision of groups that are systemically risky as the next step of the evolutionary process of insurance group oversight.