Insurance regulations may be delayed for up to two years
European insurance companies could get a break from the looming insurance regulations that are coming from the European Union. These regulations, which will cause serious changes in the European insurance industry and could push some smaller companies out of business, are currently scheduled to take effect in January, 2014. The insurance regulations put strict capital requirements on insurance companies and have been the source of controversy for some time. Now, a top European insurance regulator is working to have the implementation of these regulations pushed back.
Top regulator says new rules are too expansive to implement so quickly
Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority, suggests that the breadth of the EU insurance regulations is too expansive. Bernardino claims that the insurance regulations would be impossible to implement in 2014 due to the significant changes they would bring to the industry. According to Bernardino, the best case scenario has the insurance regulations being fully enacted in early 2015, but due to a lengthy legal and political process, it is more likely that the new regulations will not take effect until 2016.
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Insurers threaten to flee Europe for Asia
The ongoing financial crisis gripping Europe has sparked the need for tighter regulations on the insurance and banking industries, which are tied closely together. The EU has been working to introduce new regulations to the banking industry over the past two years, many of which have been unpopular with insurance companies. Prudential, the United Kingdom’s largest insurer, has warned that it will remove itself from the country in the EU insurance regulations are enacted. Other European insurers have claimed that they would move their headquarters to Asia, where the European regulations will not have a direct impact on them.
EU continues to find a way to introduce insurance regulations efficiently
The issue of insurance regulations continues to be a complex problem. The European Union is keen to address the myriad of problems that are believed to have contributed to the financial crisis, but has been unable to find a way to do so without ruffling the feathers of large industries. EU officials are currently determining whether waiting to implement the insurance regulations is the appropriate course of action. For the time being, the new rules will still be enacted in 2014.