EU watchdog eyes macro-prudential angle for insurer rules

FRANKFURT, Oct 18 (Reuters) - EU insurance watchdog EIOPAwill examine adding broad-brush measures aimed at reducing therisk of financial crises to its capital rules for insurancecompanies over the next few years, it said on Tuesday.

The EU's risk-capital rules for insurers, known as SolvencyII, came into force at the start of this year, and theireffectiveness is to be re-examined after five years.

"Our proposal is to use the 2021 overall review to integratein Solvency II a macro-prudential framework for insurance,"Gabriel Bernardino, chairman of the European Insurance andOccupational Pensions Authority (EIOPA), told an insuranceconference.

"This approach would ensure the coherence between micro- andmacro-elements, avoid the emergence of conflicting incentives toinsurers and facilitate the implementation of the regimes by therespective authorities," Bernardino said, adding that regulatorswould look at insurers' funding models and new instruments aspart of the effort. (Reporting by Jonathan Gould; Editing by Georgina Prodhan)