DAVID Cameron has claimed he is “working extremely hard” to mitigate the impact of new European rules for insurers that could force the Prudential to quit London for Hong Kong.
The Prime Minister said the so-called “Solvency II” rules were a “good example of ill thought-out EU legislation endangering a great British business that should have its headquarters in the UK”.
He added: “We are working extremely hard at a European level and with the Prudential to try and deal with this.”
Cameron made the remarks at yesterday’s session of Prime Minister’s questions, after he was asked whether he supported Boris Johnson’s campaign to keep the Prudential headquartered in the UK.
Earlier this week, City A.M. revealed that Johnson had written to Prudential chief executive Tidjane Thiam to promise to fight the Solvency II legislation so the company could stay in London.
Last week, the insurance giant admitted it was considering changing its domicile, but it is not thought to have any plans to quit Britain imminently.
Chief among its concerns is that it could be forced to raise a large amount of expensive capital against its US business, Jackson Life, because the EU is afraid that American regulators are too lax.
A spokesperson for Prudential said: “We have been working with the government and the rest of the industry to try to ensure that Solvency II ends up in the right place. It is also important for the economy that we can continue to invest for the long term in UK business and infrastructure, an ability that could be endangered by the new rules as currently drafted.”