Regulatory Radar - March 2016
Newsletter on regulation for the financial services industry
Monthly newsletter providing an overview of the key regulatory changes impacting the financial services industry
Highlights of this issue
The Mortgage Credit Directive entered into force
On 21 March the Mortgage Credit Directive 2014/17/EU (NL / FR) entered into force. The Directive, which was adopted on 4 February 2014, aims to improve consumer protection measures across the EU by introducing EU-wide responsible lending practices. Improving mortgage credit rules is considered essential to boosting confidence in the mortgage market and increasing choice for consumers.
Consumers will benefit from clearer and more understandable information with the introduction of the European Standardised Information Sheet (ESIS), which will allow borrowers to understand better the risks associated with their mortgage agreement, as well as letting them compare offers and shop around for the best product to suit their needs at the best price. The most vulnerable consumers will be better protected from over-indebtedness through Europe-wide standards for assessing the creditworthiness of mortgage applicants. The Directive also establishes principles for the authorisation and registration of credit intermediaries. Credit intermediaries that comply with the new business conduct rules will gain access to many more potential consumers in the single market via the passport regime. This will, in the long run, provide lenders with new business opportunities and will be a step towards the creation of a Single European Mortgage Market, which is expected to increase competition and to drive down prices
Publication and entry into force of the Act on the status and supervision of insurance and reinsurance undertakings
On 23 March the Act of 13 March 2016 on the status and supervision of insurance and reinsurance undertakings (NL/FR) was published in the Belgian Official Gazette, immediately entering into force the same day. The law completes the transposition of the Solvency II-regime in Belgian law, complementing the partial transposition in the Insurance Act of 4 April 2014 (NL/FR). This transposition should have been completed by 31 March 2015 and should already have entered into force on 1 January 2016, as outlined in the January 2016 issue of this newsletter.
Specifically, this law partially transposes the following directives:
- Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)
- Directive 2011/89/EU amending Directives 98/78/EC, 2002/87/EC, 2006/48/EC and 2009/138/EC as regards the supplementary supervision of financial entities in a financial conglomerate (FICOD I)
- Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (CRD)
- Directive 2014/51 EU amending Directives 2003/71/EC and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 in respect of the powers of the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) (Omnibus II)
- Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (BRRD)
This law fundamentally changes Belgian insurance law, rendering obsolete the laws of 9 July 1975 concerning the control on insurance companies and the law of 16 February 2009 on the reinsurance business. In its extensive text, the new law of 13 March regulates the settlement of (re)insurance activities in Belgium and the supervision of these activities. It aims to provide protection to insurance takers and beneficiaries, whilst at the same time ensuring the solidity and the proper functioning of the financial systems. To this end, the 9 books of the law provide a new regulatory regime on subjects ranging from the general organization of (re)insurance companies up to the recovery measures applicable to them.