A looming regulatory shake-up of the European insurance sector still threatens many companies’ business models even after policy makers voted to adopt measures to make it less onerous, the industry has warned.

A committee of the European Parliament backed a package of compromise measures in a long-awaited vote on Wednesday that paves the way for the full introduction of the so-called Solvency II capital requirements regime at the start of 2014.

Backers said the amendments– which include measures that should be of benefit to insurance companies in the UK, Spain, Germany and France – could save the industry billions of euros.

The industry had been concerned that Parliament would decline to adopt the proposals because of political concerns that some countries were receiving special treatment.

Although the committee backed the compromise deal by a majority of 37 to five, insurers across Europe that garner more than €1tn in annual premium income remained cautious.

Insurance Europe, the trade body, said the measures included “inappropriate restrictions” that would prevent them from “working as intended”.

“Such a situation could lead to unnecessary increases in the costs of complementary pensions and other retirement savings products for consumers, and could drive the European insurance industry to move away from long-term guarantee products,” said Michaela Koller, director-general of Insurance Europe.

Prudential, Britain’s biggest insurer by market capitalisation, has warned it might relocate its headquarters outside the EU as a result of the Solvency II regime.

The revisions voted on on Wednesday include a version of the “matching premium”, without which insurers would be required to hold significantly more capital to support annuity business.

This recognises that since annuity investors cannot cash in their policies, insurance companies should not be exposed to day-to-day fluctuations in bond prices. The issue was of particular concern to UK and Spanish insurers.

The measures will also allow companies to even out the impact of short-term market fluctuations, which was of concern to French insurers. German insurers also secured a concession with the inclusion of so-called “extrapolation” to estimate future interest rates.

Political opponents of the amendments were also displeased.

“Today was a good day for the insurance lobby and a bad day for policyholders and taxpayers,” said Sven Giegold, a Green MEP. “The legislative process was a case study in the dominance of vested interests of financial lobbies over general interests of consumer protection, financial stability and taxpayers.”

Parliament will begin negotiations next month with member states and the European Commission to reach a joint agreement.

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