President. – The next item is the report by Peter Skinner, on behalf of the Committee on Economic and Monetary Affairs, on Insurance Guarantee Schemes (COM(2010)0370 – 2011/2010(INI)) (A7-0243/2011).
Antolín Sánchez Presedo, deputising for the rapporteur. – (ES) Madam President, I am standing in for Mr Skinner, the rapporteur, who has asked me to express his apologies for not being present at today’s debate. He would have liked to be here, and has asked me to speak on his behalf.
Firstly, and on his behalf, I should like to thank all the shadow rapporteurs for their outstanding spirit of cooperation and the hard work they put into the report presented today.
The report on insurance guarantee schemes responds to the need to make certain that insured parties are protected against the possible insolvency of their insurance company, regardless of where their policy was taken out.
The guarantee systems currently in place in the Member States contain differing elements that reflect the respective national markets. The report supports a minimum level of harmonisation that responds to the diversity of systems in the different Member States.
The report calls on the Commission to come forward with a cross-border standardisation directive that is consistent with the ‘home’ country principle and which provides a consistent level of protection for consumers with regard to the different types of insurance products.
It also calls on the Commission to carry out detailed impact assessments and public consultations on the inclusion of different types of insurance, in order to establish a level playing field between European insurance markets.
In addition, the report asks the Commission to establish a single model for insurance company funding of the protection systems in place for insured parties in case of insolvency.
We welcome the Commission’s statement that it will draw up draft proposals in this area. Mr Skinner also asked me to express his commitment to working with the same spirit of cooperation on other insurance legislation that is currently being processed in the European Parliament.
Vicky Ford (ECR). – Madam President, please pass on my thanks to the rapporteur for his work. I know that Mr Skinner would like to see a coherent cross-border framework for consumer protection insurance, and I thank him for balancing this with much Member State discretion and respecting subsidiarity. However, I will not vote for his report.
The cost of insurance is rising in many countries and in many sectors. Insurers today face low returns on asset portfolios and increased solvency requirements, but with higher claim rates and more exposure to fraud, while in some sectors, costs are added by the gold-plating of claims packages. All these costs were added even before Commissioner Reding drove headlong into the women drivers debate. We do risk insurance becoming simply unaffordable, especially for those on lower incomes, and too often the Commission will bring forward legislation that adds costs but has little real benefit.
I want to wait and see what the Commission’s proposals are in this area before making a judgment. Fundamentally, what is the benefit of offering additional consumer protection for insurance products if we leave behind a raft of consumers who cannot afford to buy insurance products in the first place?
Monika Flašíková Beňová (S&D). – (SK) Madam President, the financial crisis has shown that consumer confidence in the financial system can be quickly undermined. This is particularly true where there are no adequate compensation procedures in place if consumers suffer losses as a result of the failure of financial institutions. Insurance guarantee schemes can be a valuable instrument for reducing the risks that insured persons are exposed to if an insurance company fails and becomes insolvent. Insurance guarantee schemes often vary, however, as regards the cover. For this reason, there are varying levels of protection for insured parties in the individual Member States.
There are also substantial differences in other aspects influencing the scope of protection provided, and also in the operating procedures and methods of funding. In my opinion, a unified level of consumer protection should be ensured, in order to maintain consumer confidence in the insurance industry, and in the single market for financial services. Consumers could then be sure that all the types of insurance product they purchase would be covered by insurance guarantee schemes, and that these schemes would ensure 100% compensation for them within a set period of time, on a unified basis throughout the EU.
Elena Băsescu (PPE). – (RO) Madam President, the EU must offer consumers protection when bankrupt insurance companies fail to honour their contractual obligations. The lack of harmonisation in this sector could distort cross-border competition and hamper the provision of uniform protection for consumers.
Romania is one of the 11 Member States which currently have at least one general insurance guarantee scheme. This means that well over half of the whole EU insurance market does not enjoy effective protection. I should emphasise the need for a European legal framework to provide complete, continuous protection to the holders or, if applicable, beneficiaries of the insurance policies. At the same time, it is crucial for the funding model for national insurance guarantee schemes to comply with the principle of subsidiarity.
Seán Kelly (PPE). – Madam President, I welcome Mr Skinner’s proposals. Certainly the whole issue of insurance has come very much to mind in recent times. I have seen in my own country a rather strange situation occurring whereby wages are going down and yet the cost of insurance is going through the roof. This is true for general insurance and particularly for health insurance. As a result, many consumers cannot afford to be insured, which is not a very satisfactory position. I have also seen, in areas where flooding occurred, that the cost of insurance went up six-fold and even then, when you read the small print, very many situations have not been covered.
So, certainly, an impact study would be very desirable in order to establish a level playing field right across Europe, to ensure that consumers are insured and that they are insured for what they think they are being insured for and for what they are paying for.
Jaroslav Paška (EFD). – (SK) Madam President, the forthcoming introduction of the Solvency II Directive from 2013 will have a major impact on the European insurance market. At present, the directive does not protect consumers from losses if an insurance company fails, and the Committee on the Internal Market and Consumer Protection therefore recommends that the Commission harmonise an insurance guarantee scheme through the directive.
A unified, legally-binding framework for the protection of insurance guarantee schemes based on minimum harmonisation looks like a good starting point. Certain problems may arise in countries without insurance guarantee schemes, particularly in relation to the cross-border activities of insurers. The EU does not have harmonised consumer protection standards, and providers operating in multiple national systems in accordance with the approach of the host country would therefore have to count on higher costs. The home country principle appears for now to be a more favourable alternative to an insurance guarantee scheme covering a larger geographical area of operation. The Commission, however, should use the remaining time to evaluate the open issues so that the desired objectives can be achieved when the Solvency II Directive enters into effect.
Miroslav Mikolášik (PPE). – (SK) Madam President, the variability of insurance guarantee schemes in the EU arises from the specific characteristics of Member State national markets. This diversity, however, brings considerable uncertainty for consumers, particularly in cross-border cases where it is not clearly established which rules will be applied. An insurance guarantee scheme at European level must ensure more effective protection of all insured parties in the EU, and should therefore also include a specification of adequate compensation procedures for consumers suffering losses as a result of the failure of financial institutions.
The draft directive on insurance guarantee schemes should improve the existing deposit protection scheme, and thus help to create more homogenous conditions on the internal market in insurance. It remains a clear priority, in my opinion, to ensure equal protection for consumers regardless of the home country of the insurer, and to raise consumer awareness of the risks associated with financial service provision.
Olli Rehn, Member of the Commission. – Madam President, I would like to congratulate Mr Skinner and his substitute, Mr Sánchez Presedo, as well as the Committee on Economic and Monetary Affairs, for the report on insurance guarantee schemes. This report marks an important step towards a European approach to overcome the fragmented landscape within a minimum harmonisation framework.
As to the timeline, the Commission plans to approve a proposal for a directive by the end of 2012. I trust that we all agree on a number of points made in the report, such as the home state principle and the importance of providing consumers with easy and appropriate information, for instance, through a single point of contact.
However, there are a few important issues on which the White Paper tabled last year presented arguments for a preliminary position of the Commission that I must recall is not exactly that of the report presented today.
On coverage, our position in the White Paper was that the insurance guarantee scheme should cover both life and non-life insurance policies.
On the level of funding, the White Paper stated that it needs to be set at an appropriate target level with a suitable transition period in an EU directive. Should funding be ex-ante or ex-post? In the White Paper, our position was that insurance guarantee schemes established at national level should be all financed, at least to a certain extent, by ex-ante contributions from insurance undertakings. The Commission, however, did not exclude that, in the case of a lack of resources, ex-ante funds could possibly be complemented by ex-post funding arrangements.
Honourable Members, this report from Mr Skinner comes at an important time when we are preparing for a European regime for insurance guarantee schemes. We believe that it will not be too difficult in the future to find a very good common ground acceptable for both the European Parliament and the Commission. We are encouraged by the commitment shown by you in Parliament, and your report reinforces this basis for our joint work ahead.
President. – The debate is closed.
The vote will take place tomorrow, 13 October, at 11.30.
Written statements (Rule 149)
Louis Grech (S&D), in writing. – The recent economic downturn and the absence of proper compensation mechanisms for consumers’ losses have, beyond doubt, adverse implications for consumer and citizens’ confidence in the financial sector. Consumers are one of the most vulnerable groups in the financial crisis and need to be reassured that their money and savings are secured. In order to effectively improve citizens’ confidence, protect consumers’ and taxpayers’ rights, and enhance market stability, European institutions must take urgent actions and build a common cross-boarder framework for IGS, without undermining the protection already offered by some Member States. The IGS should fully take into account consumer interests by providing high degrees of effective, equal and adequate levels of consumer protection. The Commission should ensure that existing legislation really benefits consumers, especially with regard to the provision of information and facilitating cross-border contact and payments. The information available to consumers in the event of an insurer’s insolvency should be easily accessible, comprehensive and easy to follow, with clear indications as to which authority the consumer should approach when making claims or enquiries. Last but not least, an appropriate target level of funding should be set, with a suitable transition period in order to guarantee that the schemes compensate consumers effectively over a wide range of circumstances.