Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-06-19-Speech-2-023"
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"en.20070619.5.2-023"2
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".
Mr President, the crisis and virtual collapse of the Equitable Life Assurance Society in 2000 was a tragedy for many hundreds of thousands of policyholders, pensioners and annuitants, not only in the United Kingdom but also in other EU Member States where Equitable Life was active. Many have suffered serious financial loss and much anguish.
The report also addresses the wider issue of how to ensure that Community law is correctly applied and how transposition is monitored. The Commission will shortly be setting out ideas on how to improve the application of Community law. Your recommendations provide very valuable ideas in this respect.
Let me once again thank Parliament and the Committee of Inquiry for its work on this sad affair and record the Commission’s commitment to making sure that the necessary lessons are learned at EU level.
Equitable Life was said to be the world’s oldest mutual life assurance undertaking, dating back to 1762. It enjoyed a very high reputation. How could such an illustrious insurer run into such serious difficulties? What conclusions should be drawn for the EU insurance single market and for the internal market as a whole?
The report by Parliament’s Committee of Inquiry, which is before you today, is a very valuable aid for answering those questions. I would like to pay very sincere tribute to the exemplary work carried out by the Committee of Inquiry. The Chairwoman of the Committee, Mrs McGuinness, and the rapporteur, Mrs Wallis, deserve the highest praise. The Committee worked hard to find the truth and give all concerned, the victims, the regulators, academics and the Commission, a chance to make their views known.
The report concerns the supervision of Equitable Life. It also highlights that the way in which transposition and implementation checks were carried out in the mid-1990s was, in retrospect, insufficient. The Committee finds that the Commission could have done more to make sure that the EU insurance rules were properly implemented and applied. I do not contest the report’s finding.
However, the report is fair in recognising that was the way things were done in those days. At that time, the Commission did its best with the means at its disposal. I also note with satisfaction the report’s agreement that the Commission is not and cannot be the regulator of the regulators.
For me, it is most noteworthy and positive that the report’s main concern is to look forward to the future rather than back to the past. So, how can we improve the situation and prevent another Equitable Life affair in the future?
The report makes 47 recommendations. Some are addressed to the United Kingdom Government, some to the Commission and others to all Community institutions. They cover transposition and the regulatory system, remedies, the role of the Commission and the role of committees of inquiry.
These are all carefully considered recommendations, which merit very serious examination. I can assure Parliament that the Commission will give most serious consideration to all recommendations addressed to it. We will, in accordance with normal procedures, give a response to Parliament in writing.
Permit me just to say a few words as regards the insurance sector, which is at the heart of the Equitable Life affair. In July I intend to present our Solvency II proposal to the College of Commissioners. It will reform comprehensively and update insurance supervision and regulation in the European Union. A key element of this project is the aim of linking the capital requirements for insurance undertakings much more closely to their precise risk profile. This will not be a zero-failure regime but will, I believe, make a collapse, such as that of Equitable Life, much more unlikely in the future."@en1
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