EUROPE’S biggest insurers yesterday hailed a crucial EU deal to introduce a new regulatory framework for insurers in Europe.
The agreement, which follows more than a decade of wrangling over the policy, is set to introduce European-wide rules on how much capital insurers need to hold in proportion to their investments and policies.
The rules, known as Solvency II, were due to come into force last year but will be rolled out from the start of January 2016.
Tidjane Thiam, the chief executive of FTSE 100 giant Prudential, backed the outcome and said plans for a revised deal needed to suit the business cycles of insurers.
“Solvency II in its original form was going to blow up the insurance sector,” Thiam told City A.M. “If you think we had a crisis in 2008 this was would have been worse. It was the single biggest threat for this company.”
He said the revised plan would allow Prudential to invest in infrastructure assets, helping boost the UK economy.
“The EU’s failure to implement Solvency II in accordance with its original timetable had left many insurers all dressed up at huge expense, with nowhere to go in attempting to comply with the rules,” said Eversheds partner Jeremy Irving.
“For the time being at least, there is greater clarity on the process moving forward.”