EU watchdog tries to keep insurance rule spirit on track
* EIOPA draws up guidelines on applying parts of Solvency II
* Interim phase will allow supervisors to be better prepared
FRANKFURT Dec 20 (Reuters) - EU insurance watchdog EIOPA is pushing ahead with key parts of new Solvency II risk-capital rules for insurers in face of a legislative deadlock heightening uncertainty in the sector.
Solvency II - aimed at better protecting consumers by requiring insurers to improve their risk management operations and more closely match capital buffers to the risks on their books - has faced repeated delays and is still not yet in its final form.
The European Insurance and Occupational Pensions Authority (EIOPA) said on Thursday it would draw up guidelines for national supervisors on applying parts of Solvency II.
"EIOPA's guidelines will ensure that important aspects of the new regime will be gradually implemented," EIOPA Chairman Gabriel Bernardino said in a statement, adding that national supervisors should have these rules in place by Jan. 1, 2014.
"This interim phase will allow supervisors ... to be better prepared for the application of the new regulatory framework," Bernardino said.
EIOPA and the European Commission have been worried that national supervisors would start to go their own way in applying the rules, in the absence of final approval of Solvency II by the European Parliament and EU member states.
Most of Solvency II is ready but lawmakers are wrangling over the how the rules will affect long-term life insurance products.
The guidelines, which EIOPA will finalise after a public consultation in the spring of 2013, will cover the system of governance, including risk management system and a forward looking assessment of the undertaking's own risks, pre-application of internal models, and reporting to supervisors.
Big insurers like Allianz, Axa and Generali are expected to be well-prepared for Solvency II, but many smaller insurers feel the rules are too complex or should not apply to them to the same extent.
Many insurers have held off on investing in improved IT systems and regulatory staff needed to apply the rules due to uncertainty about their final form and implementation date.
Regulators say the current supervisory rules are outdated and do not give them adequate information to avert potential problems in future financial crises. (Reporting by Jonathan Gould; Editing by David Holmes)
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