3. Solvency II, the European Government of Insurance Industry and Private Health Insurance

This chapter considers the political battles that led to the far-reaching reform of solvency rules governing insurance activities in the EU, between 1994 and 2016. Then we review their main implications for a particular segment of this industry, namely private health insurance. Focusing on the prudential regime laid down in EU law and regulation, we show that the adoption of Solvency II is likely to be a critical shift for the sector. Indeed, and while previous directives were essentially preoccupied with finding common rules to organize competition within the Single Market, Solvency II developed as a more conceptual architecture, with rules, requirements and standards intended to become ingrained in insurers’ daily activities. This shift was essentially legitimized as providing greater transparency and safety to financial investors and policyholders. Yet, we argue from the vantage point of private health insurance that this statement is open to doubt, and that greater financialization of entire segments of the industry could happen instead as a result of the implementation of Solvency II.