22 June 2022Law & regulation

FERMA: captive/Solvency II discussions progressing well

The Federation of European Risk Management Associations (FERMA) has seen progress on discussions about proportionality measures for captives in the upcoming revision of Solvency II following a direct approach to the French Presidency of the Council of the EU.

President of FERMA Dirk Wegener told the General Assembly of FERMA in Brussels on 21 June that FERMA held several meetings with the French Treasury and has been in close contact with the offices of key Members of the European Parliament (MEPs) working on the file, including the rapporteur.

Wegener explained the changes proposed by both the French Presidency and by the rapporteur go further in supporting captives including FERMA’s request to classify all captives as “low-risk profile undertakings" than the proposal made by the European Commission. “The deal is not done yet, but discussions are going in the right direction,” said Wegener.

The past year has seen excellent progress on the Federation of European Risk Management Associations (FERMA) priorities, and the strengthening of FERMA’s political activity and influence, said Wegener.

Wegener said that FERMA had strengthened its voice at European level as risk managers continue to express concerns about the impact of the continuing hard market and the potential of future uninsurability and with new EU legislation impacting the day-to-day role of risk managers. Linked to this is FERMA’s increase in high-level contacts with EU institutions.

He thanked the member associations for their active involvement in FERMA committees and working groups that makes this progress possible. “The strength of the FERMA network comes from working together on the things that are important to you and your members. Your participation in our activities, such as committees and events, is essential to this process.”

FERMA is also coordinating Project Lucy at European level. Initiated by the French association, AMRAE, Lucy is gathering market data on cyber insurance from 11 markets for risk managers to use in negotiations with insurers. Data collection started in February and is now available for France. Belgium and Italy will be next, followed by the remaining eight.

FERMA has also created an open insurance project group that is currently looking into the European Commission's consultation on Open Finance.

The FERMA 2022 Risk Manager Survey revealed that 41% of the respondents believe that some of their company’s activities or locations could become uninsurable in the future. FERMA’s sustainability committee has started work on a position regarding the insurance market approach to companies’ transition to sustainability.

FERMA has started to address the Presidency of the Council of the EU, which rotates among member states every six months, in addition to the European Commission and the European Parliament with whom it has regular contacts. Its aim is to establish the importance of incorporating risk management in EU policies and legislation and show how its advocacy work relates to the specific priorities of the Presidency. This has already produced concrete results in terms of the revision of Solvency II. FERMA plans to approach the Czech Presidency in a similar way when it begins its term on the first of July.