FT: Allianz critical of new EU capital rules
25 February 2011
Europe’s new capital rules for insurers are unworkable and dangerous for consumers, the chief executive of Allianz has said in some of the harshest criticism yet of the disputed “Solvency II” regime, due to come into force in 2013.
Michael Diekmann said a final round of testing of the proposed regime last year had “provided drastic evidence of the extent to which Solvency II needs to be revamped and improved.” He said that he could not imagine the rules remaining in place. Solvency II rules are intended to make insurers in Europe more closely match their capital to the risks on their books.
Insurers have complained about the volume and cost of work involved in preparing for the regime and said it is unnecessarily conservative.
Mr Diekmann said on Thursday that rules would increase the volatility of insurers’ balance sheets and create significantly higher capital requirements for life insurance, driving up the cost of policies and threatening consumer interest in a popular vehicle for retirement saving.
© Financial Times
