Prof. Wolfram Wrabetz
Executive Board Member ICIR
After the euphoria of deregulation of the 1980s and the 1990s, the financial and economic crisis has shown that the financial services industry, of which the insurance industry is an important part, cannot be organised responsibly without clear regulatory rules. Public opinion and the politics acting on its behalf are increasingly aware of this issue. As a consequence, the European Union attempts to ensure optimal competition in the insurance industry, but also prevent – whenever possible – the collapse of individual companies or the whole industry by a system of solvency rules.
The European Commission initially mandated the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) to elaborate on these rules. Frankfurt/Main was chosen as the residence for this new organisation. At the end of 2009, this institution, consisting of the national insurance supervisors of the 27 EU member states, had finished its work and presented a set of regulations which gained international importance under the name “Solvency II”. This new and EU-harmonized set of insurance regulations was passed by the European Parliament and approved by the EU commission and the EU Council of Ministers at the end of 2010. It was supposed to become legally binding for all insurance companies operating in the EU at the beginning of 2012. At the same time, the European Institutions have agreed on the conversion of CEIOPS into a European insurance supervisory authority, now called the European Insurance and Occupational Pensions Authority (EIOPA), which continues to operate in Frankfurt.
Frankfurt is now the seat of three important institutions for financial regulation in Europe: EIOPA, the European Central Bank and the European Systemic Risk Board.
The government of the State of Hesse and the City of Frankfurt have made considerable and successful efforts to keep the European Insurance Supervision in Frankfurt/Main. Nevertheless, it was clear to all involved parties that this project required support and a unique foundation from the scientific sphere. Therefore, already at an early stage, the State Government of Hesse partnered with the German Insurance Association (GDV) to develop a plan to create a chair at Goethe University in Frankfurt. Affiliated to the chair, an Institute for European Insurance Supervision, which is unique in Europe and throughout the world, was supposed to support Frankfurt’s endeavour to become the seat of EIOPA.
Therefore, all involved parties were pleased that by the winter semester 2010/2011 Prof. Dr. Helmut Gründl, an internationally recognized expert in insurance science, could be appointed as professor of insurance and regulation and as head of the newly founded International Center for Insurance Regulation (ICIR). Thus, Frankfurt reinforced its claim for becoming the European supervisory-headquarters in the financial sector.
Insurance regulation and supervision as an area of science is a relatively new approach and offers huge potential for research, teaching and practical application. This area of science can and should be used as a model for designing supervisory systems throughout the world, and therefore has both an international and interdisciplinary focus.
In the Goethe University’s House of Finance, a collaboration of economics, law and mathematics is now more of a possibility than anywhere else in the scientific world. During the first year of its existence, the International Center of Insurance Regulation started its teaching and research activities with considerable success and gained credibility both within and outside of academia. Despite the institution’s achievements, its goals for research output and teaching efforts that were set for and by the institute are ambitious. The government of the State of Hesse and the German Insurance Association will not only keep on supporting the work of the institute financially, but will also continue to follow its development with professional interest.