deputising for the draftsman of the opinion of the Committee on Legal Affairs and the Internal Market. – Mr President, I speak in two capacities, first on behalf of the Committee on Legal Affairs and the Internal Market. Their rapporteur, Mr Ripoll y Martínez de Bedoya, unfortunately cannot be with us this evening. The Legal Affairs Committee approved the proposal and had no comment to make on it. Secondly, speaking on behalf of my Group about Mr Ettl's report, I would like to congratulate him on the work he has done. He has done a good job and clearly worked very hard on this. As Mr Ettl has said, these are largely technical updates, but still important. We have not had a revision of these directives for nearly 20 years, so we are engaging in a bit of a fine-tuning exercise to modernise and update them. Like Mr Ettl, I will address the two simultaneously as they raise similar issues. I welcome these proposals as part of the wider financial services action plan which is so important for the future of the economy of the European Union Member States and could potentially deliver such great benefits to ordinary people across the European Union. There will be increased competition, increased consumer choice and lower prices in financial products which the financial services action plan can deliver, if we manage to get it right. Like most of that action plan, and based on ordinary single market principles, these directives too are based on the single passport system to enable insurance companies to sell across Europe, so long as they comply with their own home regulations. That is a principle which is, and should remain, at the heart of the legislation we adopt in this area. I welcome this effort to update solvency margin requirements: the rules relating to the capital buffer that insurance companies are required to hold against unforeseen contingencies, particularly high claims and poor investment performance. What we are doing here is essentially a warm-up for Solvency II. The more wide-ranging reform in this area will come with Solvency II. Nonetheless we need to ensure that we get the minor amendments properly sorted out before embarking on the more wide-ranging reform which we will see in the Solvency II regulation. Particularly welcome are the efforts to match regulatory capital more closely with risk profile. This is a principle we have also seen operating in the proposals on capital adequacy and solvency margins in relation to bank and investment companies. The same arguments can equally well apply here in that we are encouraging prudent risk management and rewarding those that manage and reduce risk. I am pleased to see a reference to the use of external ratings removed – it was initially proposed by the rapporteur. We do not necessarily want to rule this out forever, but it is premature to introduce it in this context. It is something we should consider in relation to Solvency II, but it needs more thought and discussion before we can introduce external ratings in this context. I am pleased also that a sensible compromise was reached on early intervention powers, which could be a useful addition to the armoury of the regulators in securing proper prudential supervision. The similar compromise on future profits was also very sensible. We are going to see the use of future profits phased out over an eight- or nine-year period, which will give the industry time to adapt to the new conditions. It is important overall to make the general point that in these proposals, as well as all others we deal with on industrial and financial services, we should make every effort to ensure that they are not overly bureaucratic and that the framework is as easy as possible for firms, both large and small, to operate in. That is the only way we will get healthy competition. Finally, I should like to comment on the timing. It is clear that there is general agreement that we should get on with these reforms as quickly as possible. Mr Ettl did a very good job in coordinating with the other two institutions. Like him, I very much hope that we can sort this out at first reading. It seems to me that we may have been doing some of the Council's homework for it, and tidying up some of those aspects which will contribute to a sensible regulatory framework. I thank Mr Ettl for the work he has done on this.

Political group: PPE-DE