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RESEARCH PRODUCT

Harmonization of Insurance Supervisory Law

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This chapter addresses the fundamental issue of what degree of harmonization applies in the Solvency II system. Distinguishing among the several degrees of harmonization—minimum harmonization, maximum harmonization, and full harmonization—leads to the conclusion that the Solvency II Directive has full harmonization as its objective. This has two important ramifications: First, the Solvency II Directive requires that any insurance supervisory regime implementation by the respective national legislators must completely align with the European insurance supervisory regime. Second, a system of full harmonization prohibits national legislators from unilaterally enacting additional measures not provided for in European law. A pertinent example in the German insurance supervisory regime is the previously extant general supervision according to the principle of abusiveness, where now the Solvency II system allows only supervision of legality.