EU insurance law 'to pass vote'

A tough new EU financial services regulation that threatens to push major insurers out of the City should pass through a crunch vote on Wednesday.

The EU's Econ committee, chaired by Lib Dem MEP Sharon Bowles, is expected to vote in favour of a compromise agreed by members last week. There were disagreements over the so-called matching premium – had the UK not got its way, German-led proposals would have resulted in increases in the capital requirements of annuity providers such as the Prudential and Legal & General.

The Pru has threatened to quit London as a result of Solvency II. The directive will force insurers to hold more capital to enable them to absorb financial shocks.

Labour's Peter Skinner, who brokered the compromise, said: "There is now a raised level of expectation that this vote should go through more smoothly."