Novae chairman: Lloyd’s early SII adoption ‘fraught with dangers’

Lloyd’s insurer Novae’s chairman John Hastings-Bass has warned of the “dangers” of the early adoption of Solvency II by Lloyd’s.

In his chairman’s statement in Novae’s 2012 results, released this morning, Hastings Bass said: “There are many good features that Solvency II has introduced to our process and procedures.

“However the early adoption of the whole regime by the Lloyd’s community looks increasingly fraught with cost dangers.”

The implementation of Solvency II has faced several days, with some commentators saying that the industry may now not have to be compliant with the new capital rules until 1 January 2016.

Hastings-Bass said that it is likely Solvency II will be implemented in some form. But he added: “The real threat is that what eventually is approved in Brussels is so significantly different that we have to tear up all that we have done and start again.

“Given that Novae itself has incurred additional costs running into the millions, it is no exaggeration to say that the whole process has imposed a significant financial and regulatory burden to the market.

“Let us hope that our British desire to embrace all that is European (and, in this case, all that may possibly, one day, be European) is not another example of zeal outweighing benefit.”