The purpose of the financial conglomerate directive (FICOD) is not currently being fully achieved, partly due to the fact it was designed and written before Solvency II came into force and must therefore be updated, said Insurance Europe, an industry association.
According to Insurance Europe, the purpose of FICOD must be to ensure there are no gaps between sectorial legislation, and to avoid duplication and overlap with sectorial regulation, including guidelines issued by the European Supervisory Authorities.
It said that FICOD should be updated to recognise Solvency II and avoid duplication of requirements already covered by Solvency II.
Furthermore, due to the lack of clarity on definitions and scope and/or supervisory discretion, Insurance Europe suggested that insurance groups can currently be required to apply Solvency II, the capital requirements directive and FICOD simultaneously.
Insurance Europe said this leads to significant unnecessary expense and effort, and avoiding this should be a key aim of any future changes to FICOD.