CEE vs. EU markets: principle based vs. rule based
At the same time, a stable legislation is needed in the CEE region, in order that a business sector such as the insurance market can help in developing the economy and the society, pointed out VVO's representative.
"It is well known for people working in insurance that insurance is a long-term oriented business model: This requires more than in other businesses a foreseeable and stable legislative environment. Only then the industry is able to contribute with its full potential to the overall development of the Economy and society. Particularly in CEE a further development of insurance markets to maturity is important in this respect. Therefore, also a level playing field for all market players is crucial. This is effected by solidarity instruments like guarantee funds (e.g. risk based contributions) and a coherent legislative environment", said Michael BRANDSTETTER.
"Another observation is the legal culture in the region which is traditionally strongly rule based. This gets in potential conflict with principle based legislation. Legal system s in GB or NL have a longer tradition in working with such tools. In the region there is maybe still the tendency to implement rules in the tightest sense which is often not the intention of the legislator but bears a lot of burden for insurance companies", added Michael BRANDSTETTER.