Insurers will be more closely scrutinized under European Union plans to better protect investors shaken by the worst financial crisis in decades.
The European Commission's plans form a core plank of the EU's response to the crisis. They are aimed at spotting any build-up of risk earlier and avoiding a need for governments again to fork out billions of Euros to prop up insurers.
The Commission proposed setting up two pan-EU bodies;
- A European Systemic Risk Council to monitor any build-up of risks and issue a call for action before they become unmanageable
- The European Central Bank
There would also be a steering group among three new authorities whose job would be to ensure EU rules are applied consistently across the 27-nation bloc. It would have powers to overrule a member state deemed not complying with common standards. Those three new authorities would oversee insurance, banking and securities markets.
The Commission's plans will go to a summit of EU leaders in June for endorsement, and the executive will come forward with draft laws later in the year. It wants the new regulatory system in place by the end of 2010. The European Parliament and EU states will have the final word on the reforms.