Europe’s top financial services policymaker has hit back at
criticism from insurance companies that new capital rules are too conservative, claiming that the changes are necessary to protect policyholders and improve an outdated regime.
In a letter seen by the Financial Times, Michel Barnier, EU internal market commissioner, has told four leading insurance industry bodies that “criticisms levied against
Solvency II, particularly that calibrations are too high, have not been confirmed by evidence”
The
new rules are due to come into force in 2013 and are supposed to better match insurers’ capital with the risks they take. Mr Barnier points out that tests have shown that the industry overall has a buffer of €360bn ($527bn) more than the new regime’s capital targets and €676bn more than the required minimum capital – a level which, he says, exceeds the margin under the current regime.
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