Deaths indirectly related to Solvency II there therefore

This title may seem provocative, but it is simply premonitory. In the general indifference, in crisis, the authorities of international regulation of insurance companies are set new prudential standards which - to simplify barely - will prohibit insurers to invest in shares. More exactly, the requirement of additional own funds that insurers will be will be so heavy that they will be almost forced to sell their portfolio shares (listed and more serious still, non-listed) or, at least, not increase it.

Insurers do not have the monopoly of the pro-cyclical regulations (which exacerbate the crises). Banks, indeed, have nothing to envy them with their accounting standards (IAS standards) and prudential (Basel II, which are supportive of the "subprime" credit and very unfavourable to the development capital...). Walk on the head! In the heart of the crisis (because it is not finished), everything seems to discourage financial institutions to do their work (i.e. finance companies). But that there are more serious in the case of insurers, is that they are in Europe, the main investors in the long term. To take as an example, life insurance, being the preferred placement of the French (1,200 billion euros of stock, or 41 of households in 2008 investments), the portfolio actions French insurers represented 352 billion euros in 2008, that is equivalent to 40 of the market capitalization of the place of Paris.

Discourage insurers to invest in shares will have three negative effects at least. The first is obvious: less, this means a lesser performance of contracts of life insurance and pensions, and, for mutual, with inevitable increases in rates (20, according to early estimates). At the same time where, in France, the problem arises of financing the retirement, what a good idea! A second effect: a more difficult financing for businesses, and SMEs in particular. At the same time where the banks are more averse (and more constraints rule, they also), hat! Third effect, Americans applying with less zeal that the European international prudential rules and featuring of pension funds (which are not subject to Solvency II and which can quietly buy CAC 40), one cannot offer, on a plateau, most wonderful competitive advantage to our competitors in Anglo-Saxon. Awesome! If one adds to this that the banks will be driven by their own prudential rules to sell their insurance companies (the Dutch company ING has already opened the ball), challenging the European model of bank-insurance (that is, better than that of Lehman Brothers, resisted the crisis), it has a small idea of what the future will bring.

It must cease to believe that the amendments to financial regulations have no social impact. Less pension and, especially, less financing business, this translates as by "case-sensitive" human. It is than to see the deterioration of the conditions of existence of certain categories of retirees or to observe the "damage of progress" in corporations in filing their report funding, to realize. Deaths indirectly related to Solvency II there therefore. But more serious because of greater macroeconomic importance, Solvency II, applied in its current configuration by all insurance companies, may, accentuating the "financing crunch" suffered by companies today, driving hundreds of thousands of unemployed and more. Is it really needed Solvency II, concocted in the House, reform is probably one of the financial reforms which the power of destruction of jobs is the highest since the end of the second world war.

That face this risk European insurers must put parentheses their small infighting (between private insurers and mutual insurers including) for the impact of this new regulatory measures which do not stop at the frontiers of finance. And, above all, policies must stop to consider that it is a strictly technical problem. The European regulator (Ceiops) continuing to do so as if to nothing was, it is urgent to give voice.