European Parliament
Recovery and resolution of insurers - ECON publishes draft report on proposed Directive - 8 June 2022
The European Parliament’s Economic and Monetary Affairs Committee (ECON) has published a draft report (dated 2 June 2022) (2021/0296(COD)) on the proposal for a Directive establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending the Financial Collateral Directive (2002/47/EC), Directives 2004/25/EC and 2017/1132, the Solvency II Directive (2009/138/EC), Regulation 1094/2010 and the European Market Infrastructure Regulation (648/2012/EU) (EMIR). The European Insurance and Occupational Pensions Authority first suggested that the harmonisation of national recovery and resolution frameworks for insurers and reinsurers within the scope of Solvency II would contribute to the protection of policyholders, the maintenance of financial stability and protection of public funds in a July 2017 opinion.
While the rapporteur, Markus Ferber, shares the assessment that rules should be available to manage the failure of cross-border insurance or reinsurance undertakings, he takes the view that the proposed framework raises a number of questions that have not been answered yet. There are questions as to how useful recovery and resolution tools can be in the absence of harmonised rules for insurance guarantee schemes. Furthermore, a number of aspects in the present proposal have been taken from the banking sector, without due regard to the specifics of the insurance market.
The European Commission adopted the legislative proposal in September 2021.
ECON I Draft Report: on the proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2009/138/EC, (EU) 2017/1132 and Regulations (EU) No 1094/2010 and (EU) No 648/2012 (2021/0296(COD))
Financial Conduct Authority and The Pensions Regulator
Pensions consumer journey - FCA and The Pensions Regulator publish Feedback Statement (FS22/3) - 7 June 2022
The FCA and The Pensions Regulator (TPR) have published a Feedback Statement (FS22/3) following their May 2021 call for input on the behaviour of consumers at key points in the pension saving journey. Most respondents to the call for input agreed that the stages of the consumer journey set out in that document provided a broad basis for engaging with the consumer, but said that the journey was highly personalised and non-linear with consumer decisions and touchpoints mainly shaped by life events, such as changing jobs or buying a house. The personalised journey means that savers need tailored support throughout their lives. Different types of organisation across the pensions industry said that given the low levels of consumer financial literacy, there remains real difficulty in communicating about pensions.
Respondents also noted that many of the structural issues affecting pensions reflected wider issues in society; some offered potential mitigations to inequalities in pensions outcomes associated with gender and religion. Pension dashboards were also highlighted as a potential key tool in enhancing engagement with pensions.
Rather than making new rules, the FCA and TPR have committed to a range of other measures, such as publicising the ‘Midlife MOT’ toolkits available for employers and encouraging larger schemes and providers to support employers in this initiative, as well as working with the Money and Pensions Service to produce guidance that enables employers to support staff returning to the workforce. The Feedback Statement also refers to the FCA’s proposed consumer duty rules which aim to set a higher expectation for the standard of care firms give retail consumers. Vulnerability will be a relevant factor for firms to consider under current proposals in relation to the consumer duty.
FCA and TPR Feedback Statement: Pensions consumer journey (FS22/3)
FCA webpage
