Solvency of Insurance Undertakings (Mueller-Report) - Eiopa

extent taking account of inflation and market development since 1979. If the consumer price indexEUR 12/ 15 is taken as a base, due to the lack of a more appropriate index, the amount of ECU 2.3million is obtained. The great majority of the working group members is in favour of fixing aminimum amount of ECU 2.5 million. A minority considers this amount to be insufficient andsupports a substantial increase to ECU 4 - 5 million, with the banking regulation taken as an example(minimum start-up capital ECU 5 million).Almost all delegations consider it in principle desirable that the minimum amount be reviewed andup-dated at regular five-year intervals by applying the comitology procedure; the regular adjustmentsshould help avoid extreme increases, as are occurring now after the old amounts have beenmaintained for nearly 20 years.4.1.3 ExceptionsThe working group sees a need for action also in life insurance. The question arises, however, ifexceptions should be made only for existing undertakings, given that all delegations are of the opinionthat new companies intending to write life insurance must meet the same requirements as regards theminimum guarantee fund as long as they come within the scope of the directive, irrespective of thevolume the intended business is supposed to have.What was said about non-life insurance is also true for life-insurance. A solution which would implyraising the threshold mentioned in article 3 of the first life insurance Directive is generally rejected forthe same reasons as in non-life insurance.Restricting the business to certain geographical regions or professions is not possible because thereare no reliable definitions of "regional" and "restricted to certain professions".In view of the fact that in contrast to the situation in non-life insurance, only very few undertakingswhich are probably in just one member country are concerned and that new undertakings should notcome under the scope of a special regulation, this problem could be solved by finding a generoustransitional solution based on article 20 (2) (c) of the first life-insurance Directive which wouldcomprise not only mutual societies but all legal forms.Also in life insurance, no agreement can be reached on the question as to whether or not the right thathas been granted to the member states up to now to reduce the minimum guarantee fund forcompanies having the legal form of a mutual society, should be maintained. A clear majority is againstfacilities for mutual societies coming within the scope of the Directive because the solvency marginmust depend only on the risks covered by a company but not the legal form and the possibledifficulties associated with it to procure capital.There are no objections, however, to maintaining the present possibility to reduce the requirementsapplying to tontines by 25 %.- 27 -