Abstract
In the late 2000s, the European Union (EU) undertook a significant reform of the framework for insurance regulation and supervision through the Solvency II directive, which substantially updated prudential rules and supervisory practices. This article addresses the question of what has driven the reform of the framework for insurance regulation and supervision in the EU. It is argued that the politics of the Solvency II directive was characterised by a strong alliance between the Commission and the United Kingdom, backed up by the large member states, some old member states and industry, particularly large companies and transnational groups. The United Kingdom was, however, the pace setter, whose influence was underpinned by the size of its insurance market; the expertise and effective coordination of national policymakers, and a state-of-the-art domestic regulatory model.
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Notes
Following the terminology introduced by the Lamfalussy architecture (Committee of Wise Men, 2001), at level 1, the EP and the Council co-decide framework legislation proposed by the Commission. At level 2, the implementing measures (generally directives, less frequently regulations) of the level 1 framework legislation are adopted by the Commission through the comitology process, which involves the so-called level 2 committees of member states representatives. At level 3, the committees of national regulators (the level 3 committees) advise the Commission on the adoption of level 1 and level 2 measures and adopt level 3 measures, such as non-legally binding standards and guidelines.
According to the congruence procedure, theoretical predictions concerning the outcome of the dependent variable are compared with the real outcome. If the real outcome is consistent with the predictions, then there is at least a presumption of a causal relationship (see George and Bennett, 2005).
See the minutes of the Insurance Standing Group August 2005, http://www.fsa.gov.uk/pubs/international/isg_minutes1.pdf, see also the minutes of the meeting of February 2006 on the use of the group model, http://www.fsa.gov.uk/pubs/international/isg_minutes6.pdf.
http://www.fsa.gov.uk/Pages/About/What/International/solvency/isg/index.shtml, accessed June 2008.
I wish to thank a referee for this point.
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Acknowledgements
Financial support from the European Research Council (204398 FINGOVEU) is gratefully acknowledged. I thank all the practitioners who made themselves available for interview as well as the reviewers for their perceptive comments.
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Quaglia, L. The politics of insurance regulation and supervision reform in the European Union. Comp Eur Polit 9, 100–122 (2011). https://doi.org/10.1057/cep.2009.12
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DOI: https://doi.org/10.1057/cep.2009.12