Angry insurers call for an end to EU regulation uncertainty
Sunday 23 December 2012
Britain's insurance industry has expressed its "huge frustration" with the EU for continual delays to new regulations it says have already cost the sector more than £1bn in red tape.
The Association of British Insurers has said it had no idea when Solvency II was going to be introduced – despite the capital rules being in the planning since 2004.
The regulations are designed to protect consumers, yet experts have warned that in their current form they could cut UK retirement incomes by up to 20 per cent. Prudential, Britain's largest insurer, has also threatened to move overseas if they are not changed because they impose unfair requirements on its US business.
Hugh Savill, the ABI's director of regulation, said: "The earliest date it could now happen is January 2016 and that's pushing it because we'll go through key political changes in Europe before this. We are looking at a substantial interim period.
He said: "It's a huge frustration because more than £1bn has been spent across the UK industry getting it ready. Given that we didn't increase premiums to cover this cost, it's been difficult for insurers to take."
Last week, Europe's insurance regulator said it planned to phase in some of the rules from 2014. However, with approval from the European Parliament and EU states still some way off, the ABI warns this could just confuse the situation further.
"Pressing ahead with early Solvency II reporting requirements would be an extra unnecessary burden on the industry," said Mr Savill. He added: "UK Insurance companies are angry because they have spent so much and still don't know what system they will be left with."
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