We feel so awareness of the market taken as a whole

What is the situation of the French insurers under solvency I criteria

The French companies solvency of the Insurance Code is satisfactory as 2004 and 2005 were two good years for the sector. On average, they present a corresponding to two to three times the minimum required solvency margin. But this is not to say that they have a surplus of capital. Coverage of commitments by the assets is important as, in any case within the meaning of French regulators, that the level of own funds, which is not sufficient to measure solvency alone. It is for this reason that it was desirable to reform solvency I, so particular to include the measurement of the solvency of the point of view of the asset-liability management.

Could distortion of competition arise from these differences in measurement of credit between regulators

I do not would the existence of a possible distortion of competition. The France was applicant genuine harmonisation because the directive was not applied in the same way in all countries. The United Kingdom, which changed its system of credit, for example strictly apply the directive, but the control authority has addition a discretionary power to determine the level of capital.

Have to win and lose the insurers with Solvency II

They have several benefits from reform. First, an advantage in their management of risk relative to competitors. French insurers are more cautious than in other States of the Union and are very well placed in terms of technical provisions. They thus have a stronger balance sheet. But they need to strengthen their internal control system. Indeed, Solvency II should allow control authorities to increase the capital requirement in the event of failure of the internal control system. Major insurers, in turn, should benefit from the recognition of their internal models. However if the confidence level of technical provisions is scaled, insurers and insured persons lose security. It will be that companies compensate this by a greater risk control and a greater responsiveness for underpricing including. Moreover, I still that Solvency II is not only a management tool and a tool of prudential supervision.

Are you willing to model retaining the geographical and operational diversity to sous-pondérer own funds

We are studying this model. The size and diversification can actually offer some benefits in the distribution of the risks, but they are not without inducing disadvantages. For example, a group with a unique brand can see travels across its subsidiaries image and reputation risk which was local. In addition, if, with this approach, the will of the major groups is to maintain a level of minimum capital in subsidiaries and a surplus at the level of the holding company, or the surplus of a subsidiary to cover the undercapitalisation of another country, should still show by legal instruments that the surplus of capital of a subsidiary will be immediately available in another. This seems difficult today because of bankruptcy rights differ in Europe.

How internal models will be taken into account

Internal models may be accepted for the calculation of the solvency margin target (SCR) after approval of the supervisory authority.

To what extent can Solvency II change the landscape of insurance

Major groups have a strategic interest to apply internal models to obtain equity weighting less than standard models. This could give them the appetite to absorb smaller actors. For our part, we in any case that the models for the calculation of own funds have a neutral effect from this point of view. Must be that internal models work according to the same degree of care of technical provisions than standard models. However, the European political authorities could eventually decide otherwise.

French professionals appear it they sufficiently aware of the issues of Solvency II

Yes, if judged by the rate of responses to the first quantitative studies of impact on the technical provisions. In November, we had asked the French insurance companies work very important for such impact studies. However, their response rate is one of the best among the States of the Union, on a par with British companies. We feel so awareness of the market taken as a whole.

Major insurers are demanding the creation of a "European Chief supervisor", which would be responsible for the control of the groups at the consolidated level. Will go on until there

The CEIOPS, the body constituted European representatives of the supervisory authorities, is not on this line. It seems to me that there would be a serious loss of the quality of control if a single authority exercising supervision of the whole of the European subsidiaries of an insurance group. Control of each subsidiary at the local level remains the best system in practice. First, because local authorities are always the most competent in their market, which they are familiar with the operation and features. This "solo" control must nonetheless integrate into a control coordinated at the level of the group as a whole. This coordination is now in place in accordance with the Helsinki Protocol.