Further delays to the implementation of Solvency 2 will compromise the ability of European insurers to deliver protection for their clients in a riskier world, according to Professor Karel Van Hulle, speaking at the Risk Management Forum of the Federation of European Risk Management Associations (FERMA) in Maastricht today (Monday).

1. Press release
Embargo to 10.15 am CET Monday 30 September 2013
Van Hulle says that Solvency 2 delays hurt European
insurers
Further delays to the implementation of Solvency 2 will
compromise the ability of European insurers to deliver
protection for their clients in a riskier world, according to
Professor Karel Van Hulle, speaking at the Risk
Management Forum of the Federation of European Risk
Management Associations (FERMA) in Maastricht today
(Monday).
See FERMA views on Solvency 2.
Professor Van Hulle, who retired as head of pensions and
insurance at the European Commission in March, told the
1400 European risk professionals attending the Forum:
“The insurance industry will become increasingly
important in this risky world but without sound risk
management and a risk-based solvency regime, insurers
will not be able to deliver. They will lack the data and
tools to know that they can honour their commitments.”
He said that the entry into force of Solvency 2 is not now
likely before 2016, because the failure to agree on
Omnibus II, a measure to amend the framework directive
for Solvency 2, has stalled developments since 2009. A
three-way discussion involving the European Parliament
and Council and the Commission is intended to resolve
the main outstanding issues on Omnibus II in October
2013.
Professor Van Hulle urged these trialogue parties to finish
this last step as soon as possible in the interest of all

2. stakeholders. “This is an area where Europe can show
leadership,” he said.
Solvency I, the prudential regime for insurers currently in
effect, has important limitations, said Professor Van Hulle.
For example, it does not require insurers to take into
account the current low interest rate environment. Nor is
it a risk-based approach where there is awareness of the
shifting exposures that face the insurance industry. This
makes it difficult for insurers to respond to societal
demands such as:
• Privatisation of parts of social security including
health insurance and long term care;
• New challenges: pensions – climate change;
• New technologies: will the system function as we
have designed it? Will human beings function as
planned?
• A continuing role as institutional investors.
Said Professor Van Hulle: “The insurance sector is the only
major economic sector for which there is so far neither an
agreed international accounting standard nor an agreed
international solvency framework.”
FERMA views on Solvency 2
The President FERMA, Jorge Luzzi, said: “The continuing
delays to the adoption and implementation of Solvency 2
are already creating uncertainty for captive owners who
do not know what capital and reporting requirements
they will have in future.”
FERMA welcomes a rigorous and consistent prudential
regime for European insurance companies, but it has
repeatedly stressed that the regulations should be
proportionate to the risk. “Solvency 2 should make a clear
distinction between insurance companies serving the

3. public and captive insurers whose only business comes
from their parent companies,” said Jorge Luzzi.
“We are also concerned that Solvency 2 could result in a
reduction in the capacity of the market to cover emerging
risks and unusual exposures. We fear that some niche
insurers, who provide useful specialist capacity, could find
their business no longer attractive once they have to
meet the new capital requirements of Solvency 2.”
Notes to journalists
Risk management professionals, including risk and
insurance managers, insurers and brokers, from across
Europe are participating in the three day FERMA Risk
Management Forum in Maastricht.
For full details of the event: http://www.ferma.eu/ferma-
forum-2013/
Press contact
Lee Coppack, FERMA media coordinator, at
lee@coppack.co.uk
Onsite number: +44 7843 089904.
From 3 October 2013: +44 208 318 0330
About FERMA
The Federation of European Risk Management
Associations (FERMA) brings together 22 national risk
management associations in 20 European countries.
FERMA has 4,200 individual members representing a wide
range of business sectors from major industrial and
commercial companies to financial institutions and local
government bodies. These members play a crucial role for
their organisations with respect to the management and
treatment of complex risks and insurance issues.

4. Member associations are from the following countries:
Belgium (BELRIM), Czech Republic (ASPAR CZ), Denmark
(DARIM), Finland (FinnRiMa), France (AMRAE), Germany
(DVS/BfV), Italy (ANRA), Luxembourg (ALRiM), Malta
(MARM), Netherlands (NARIM), Norway (NORIMA),
Poland (POLRISK), Portugal (APOGERIS), Russia (RusRisk),
Slovenia (Sl.RISK), Spain (AGERS and IGREA), Sweden
(SWERMA), Switzerland (SIRM), Turkey (ERMA) and United
Kingdom (Airmic).