PRA also criticises delays to the new regulations
The Prudential Regulation Authority (PRA) chief executive Andrew Bailey (pictured) has criticised Solvency II in a letter to the head of the Treasury Select Committee.
In the letter to Andrew Tyrie, Bailey said the progress of the regulations had “ground to a halt” as conflicting national interests cause delays to the process. He also criticised the reforms for becoming “lost in detail and vastly expensive”.
Bailey said that insurers and regulators had spent large amounts of money preparing for the implementation of Solvency II but that it “carries no promise in terms of when – or in what form – it will be implemented”.
The head of the new regulator called on politicians to investigate the Solvency II process amid further delays to the regulations being implemented. Bailey said: “It would be a help if parliament could cast light on a process that has gone on for the best part of 10 years.”
In response, Tyrie said that Solvency II was an “object lesson in how not to make law” and the Conservative MP said he took concerns “very seriously and plans to examine them further in the coming months”.
The regulations are not expected to be implemented until at least 2016, with the latest delays coming from a European Insurance and Occupational Pensions Authority investigation into how life insurance policies with consumer guaranteed returns will be treated under the Solvency II regime.
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