Edited by Julian Burling and Kevin Lazarus
Chapter 14: Principles-based Insurance Regulation: Lessons to be Learned from a Comparison of the EU and German Law of Risk Management
Petra Pohlmann The EU Member States have to implement the Solvency II Framework Directive by the beginning of 2013. The new, principles-based regulatory approach brings new requirements for the national legislative bodies and supervisory authorities. This chapter identiﬁes the speciﬁc questions posed by the creation of principles-based law. It begins with an account of the background (section 1) and goes on to compare the principles of risk management ensuing from European and German law (section 2) before exploring how the concept of principles-based law is understood (section 3) and how the principles are ﬂeshed out by further legal instruments (section 4). The ﬁndings (section 5) are to heighten the awareness of the legislative bodies and supervisory authorities of the problems involved in designing a new insurance supervision regime for Europe. 1. BACKGROUND 1.1 Solvency II Pursuing a program of harmonized insurance regulation the third-generation Insurance Directives of the European Union established with the single license principle an ‘EUpassport’ for insurers.1 Many Member States, however, considered the EU framework of insurance regulation to be insufﬁcient. They implemented their own reforms, which led to a patchwork of regulatory requirements across the EU. To correct this the Solvency II Framework Directive2 (in this chapter referred to as ‘the Directive’) was initiated by the European Commission in 2000 and adopted by the European Parliament on 22 April 2009 and by the Council on 10 November 2009. It is due to be implemented by 1 January 2013.3 It implements a new EU-wide...
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