Calls for regulatory simplification from European insurers have met with a positive response from the principal regulator, the European Insurance and Occupational Pensions Authority (EIOPA).
Simplification is at the top of the regulatory agenda across Europe, echoing the debate about post-Brexit reforms to solvency regulation in the in the UK. Although rarely mentioned in European Union circles, the UK’s focus on competitiveness seems to have focussed minds in Brussels.
The call for simplification was led by pan-European trade body Insurance Europe which heralded its submissions as “a focused, high-impact simplification agenda, including a Financial Services Omnibus, to strengthen competitiveness, deepen the Single Market, and put more capital to work for Europe's future.”
It highlighted the key role of insurers’ €9.5tr investment portfolios, arguing that “the sector is a cornerstone of Europe's long-term financial resilience. The industry mobilises patient capital for green and clean technologies, innovation, defence capabilities and the energy transition, and supports Europe's competitiveness every day.”
It tabled a long shopping list of demands for the European Commission and EU finance ministers to contemplate:
1. Stopping unnecessary new regulations
- Withdrawal of the Financial Data Access proposals
- Not pursuing minimum harmonisation of Insurance Guarantee Schemes
2. Simplifying existing regulations (included in the Financial Services Omnibus)
- A “stop the clock” on the Insurance Recovery and Resolution Directive to reassess scope, proportionality and implementation timelines.
- Targeted adjustments to Solvency II Pillar 2 and Pillar 3 requirements, without compromising the recent political agreement, and acknowledging the progress achieved with the Solvency II review, consistent with the objectives of the simplification agenda.
- Further simplification of the EU Green Taxonomy, to reduce excessive reporting burdens – a long-running demand of European insurers.
- Addressing disproportionate accounting and audit rules, in particular for SMEs.
- Avoiding overlaps and reducing bureaucracy under the Digital Operational Resilience Act.
EIOPA has responded with a proposal to significantly reduce the reporting requirements under Solvency II with a series of amendments to the supervisory reporting and disclosure requirements under Solvency II. It wants to reduce the frequency of certain templates, delete some annual templates “making greater use of proportionality principles and introducing technical simplifications across the framework”, says the regulator.
If implemented as proposed, the reporting burden would be reduced by 26% for solo undertakings in terms of number of quarterly templates (36% for small and non-complex undertakings), by 30% in terms of annual templates (44% for small and non-complex undertakings) and by 22% in terms of data points.
EIOPA says the proposed reporting reductions would bring meaningful benefits – including a better use of the principle of proportionality – without jeopardising EIOPA’ and national supervisors’ ability to uphold the protection of policyholders and to maintain financial stability in Europe’s insurance sector.
Insurance Europe says that national regulators have a key role to play in embracing the simplification agenda:
“National policymakers also have a responsibility. Every instance of gold-plating should be clearly justified, ensuring that any additional requirements are both proportionate and genuinely necessary. This is essential to maintain regulatory consistency across Member States, reduce unnecessary burdens, and enhance legal clarity and predictability within the Single Market.”
UK moves ahead with competitiveness and growth agenda
Progress towards delivering a new regulatory regime for the UK with a focus on competitiveness continues apace as regulators align supervision with the government’s growth agenda, including reducing legacy Solvency II reporting burdens in a new Solvency UK regime.
One of the most significant moves has been the decision to establish a bespoke UK captive insurer regime. In July 2025, the Treasury confirmed it would proceed with a framework designed to make the UK a credible onshore domicile for captives, reversing the historic trend of UK corporates using offshore captive locations. In order to ensure this regime is attractive, firms operating withing it will enjoy proportionately lower capital requirements, lighter reporting and faster authorisation pathways. Industry calls to allow captives to operate through protected cell companies have also been accepted by government, widening access for mid-sized firms and start-ups.
Formal consultations on the detailed rules are expected this summer, supported by technical working groups with market participants, with secondary legislation for captives and protected cell companies expected during 2027 and a full regime launch currently planned for the end of 2027.
This work has obviously not gone unnoticed in Europe, hence the renewed calls for regulatory simplification.
Insurance Europe submission AstronginsurancesectorforastrongEurope_InsuranceEurope.pdf