INSURANCE: MEPS BACK NEED FOR PAN-EUROPEAN REINSURANCE SUPERVISION.

Peter Skinner (PES, UK) commends the Commission in his report for its "exemplary" work, and stresses the need for a new Directive, as opposed to a voluntary regime, because of the high level of risk to which reinsurers are often exposed.

Mr Skinner particularly welcomes the Commission's proposal to remove the use of collateral to secure reinsurance contracts, which is customary practice in certain member states such as France

In its original proposal, the Commission notes that forcing reinsurers to pledge assets to cover outstanding claims provisions makes it harder to manage investments efficiently and ultimately results in higher operational costs for reinsurance undertakings, which would then be passed on down the chain to the consumer.

Mr Skinner, in the report, notes that collateralisation "is no longer an effective regulatory tool and represents an inefficient use of capital, which could otherwise be released into the wider economy thereby...