Covéa
Covéa is a mutual insurance group and a leading french insurer in the field of non-life, life and health insurance through its three brands, MAAF, MMA and GMF and a leading global reinsurer with the PartnerRe brand.
ID: 292788511327-55
Lobbying Activity
4 Sept 2025
General observations and comments Covéa is a major insurance and reinsurance Group with a strong long-term commitment. Accordingly, it expects the Solvency 2 revision to enable a more effective consideration of long-term issues. In particular, the primary expectation lies in the proper integration of long-term risks into the solvency assessment framework of market participants to accurately reflect insurers risk profiles. This is especially relevant with regards to the Long-Term Equity Investments (LTEI), as highlighted in the first of the items listed below. The consulted proposal on LTEI remains unfortunately both too conservative and impractical. The approaches based on duration and liquidity buffer are based on overly restrictive criteria, notably with a duration threshold set at ten years for the life approach and the exclusion of assets held through liquid investment vehicles in the non-life approach. The approaches under the forced selling test do not reflect a realistic situation of stressed cash flows as it combines the severity of several SCRs. This stands completely out of the range of a probable adverse scenario and compromises the value of the demonstration. Only the cash flows of the central scenario should be stressed on the SCR metrics. An SCR equivalent scenario provides the sole relevant adverse case to explore. Finally, the scope of funds eligible for the simplified look through approach needs to be significantly widened. An appropriate definition of the VA is crucial to encourage long-term investments. The definition of the CSSR should correctly reflect the impact of spread widening on own funds through an accurate link between spread changes on markets and the VA in the Best Estimate. It is also crucial that the risk correction formula would not lead to an exacerbation of procyclicality in case of crisis. Risk margin: The reduction of the lambda factor to 96% is a positive step forward but still falls short of the industrys expectations. The 50% floor should be dropped, as it unduly restricts the effectiveness of the lambda in supporting long-term guarantees. A lambda of 92.5% with no floor would allow the industry to remain competitive both in countries without a risk margin or with a lower calibration. The changes in the Interest Rate Risk SCR remains significantly overstated and might even become unbearable under certain market circumstances. It will substantially weight on the benefits of the review, while creating a risk of unlevel playing field with other jurisdictions where such changes have not been foreseen or adopted. Beyond LTG elements, many proposals are seen as overly restrictive and/or operationally complex, particularly regarding EPIFPs and, the recognition of reinsurance in the standard formula or best estimates. The ability for supervisors to challenge availability of group EPIFPs stands as inappropriate. Changing the treatment of EPIFPs would undermine the consistency of the core prudential framework, eliminating a key incentive to provide long-term guarantees by locking up capital in legal entities, preventing its use for economic growth or closing protection gaps. Most importantly, derecognition of EPIFP would be impractical and severely distort solvency ratios for EPIFP constitute an intrinsic outcome of the projections of the future premiums within the contract boundaries as per article 18 of the Delegated Regulation and, as such, are inseparable of the associated best estimates components. Therefore, EPIFP are intrinsic of insurance contracts terms establishing the realistic balance with the SCR and risk margin requirements associated with those future premiums. Minimum group SCR: The Commission is bound by the Level 1 text to specify the application of the group minimum SCR. It should clarify the elimination of the non-economic double counting of risks, which has no equivalent globally and would unfairly disadvantage European groups.
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