THE insurance industry voiced concern yesterday at European regulators’ plans to run a new series of “stress tests” on more than 200 companies across the region.
The second round of tests to check how well-capitalised insurers are against different risks was launched by the European Insurance and Occupational Pensions Authority on Tuesday. The new tests will be based on the planned Solvency II legislation, which requires insurers to hold more regulatory capital against different risks. They will be carried out by the Financial Services Authority from now until the end of May.
But the Association of British Insurers branded the tests a “distraction from vital regulatory change” that would put extra strain on firms racing to comply with other requirements that are still to be finalised.
“Rather than demand stress tests on the basis of a yet to be agreed framework, it would be better to focus on finalising the proposed rules and helping the industry put the infrastructure in place to make them work by 2013,” said ABI director Peter Vipond.
PwC partner Philippe Guijarro said the tests would “put a huge strain on the industry’s already stretched resources” while the unfinished nature of Solvency II at present may render the results unreliable.