INSURANCE SUPERVISION AND RISK MANAGEMENT ACCORDING TO THE 9TH VAG AMENDMENT WITH RESPECT TO SOLVENCY II

Abstract

In this article, the national and European financial supervisory developments and their correlations to the German VAG are presented with a view to a new European financial supervisory system. At the same time, it is shown that the companies have to reckon with an increased (cost and work) effort as well as a changing (liability) understanding of risk. After the global financial crisis of 2009, national legislators and European legislators became increasingly concerned about a functioning, long-term stable financial system and effective consumer protection. In order to achieve these goals, in order to limit a purely liberal understanding of the market economy, more and more equity safeguarding and supervisory regulations are being issued at national and European level. The European Union (EU) had already started implementing these goals before the 2009 financial crisis by enforcing the capital base and supervisory requirements with the Solvency I and II directives of 2002 and 2007, based on Basel II. Solvency II will not become legally binding officially until November 1st, 2012. In addition, an ordinance on insurance supervision came into force in January 2011, with which EIOPA was founded. The German legislator acted at national level with the 9th VAG amendment and the law to strengthen financial market and insurance supervision. Sections 7a and 64a VAG should be emphasized here in terms of insurance supervisory law. The German legislature is thus partially implementing Solvency II before the deadline for the directive expires on October 31, 2012. On the one hand, German companies as such, the internal market and consumer protection should be further stabilized and, on the other hand, the competitive position of German companies compared to foreign companies should be strengthened. Despite their controversial legal nature and binding nature, the sub-statutory regulations of the Federal Financial Supervisory Authority, the regulatory minimum requirements for risk management in insurance companies, are noteworthy.