The Solvency II reforms as currently proposed would reduce the amount of insurance capacity available to UK businesses and put up the cost of cover, AIRMIC has warned ahead of final proposals from European insurance and pensions regulations, CEIOPS, on the implementation of the Directive.
AIRMIC reiterated its support for the original principles of Solvency II, but said that the reform had strayed from its original mission and would impose burdens out of proportion to the problems it was addressing.
“The sharp increase in capital requirements for insurance companies under Solvency II means that there will be less choice of insurance, less flexibility and greater cost. Insurance companies do not pose systemic risk to the economy and, unlike many banks, they have not been found wanting in the recent financial crisis,” said John Hurrell, CEO at AIRMIC.
