EU close to Solvency II agreement

The EU is close to striking a deal over the Solvency II insurance rules on how much capital eurozone firms must hold as a safety buffer, officials have said.

The rules seek to improve the method for deciding on the size of the financial safety buffer that insurers must hold by improving the way risks and liabilities from customer policies are assessed.

British Labour MEP Peter Skinner, who is one of a team of lawmakers negotiating over the rules with members states, said yesterday that a deal was now on the table.

The rules, which were originally due to come into effect late last year, were postponed to apply lessons from the financial crisis. They were further delayed by calls from insurers in Germany, France and Britain for more leniency over the capital sums required for products offering guaranteed returns.

Skinner said more had been understood about the rules so that a far more practical approach could be implemented. But he declined to say when the new rules would start.

Regulators have indicated 2016 as a possible start date. Some elements, such as rules covering German products, could be phased in.