UK's Prudential urges caution on EU capital rules

LONDON, July 9 Tue Jul 9, 2013 4:36am EDT

LONDON, July 9 (Reuters) - Getting new European Union capital rules for insurers wrong could hinder the flow of capital in the region and crimp economic growth, a top UK insurer said on Tuesday.

EU states and lawmakers are due this month to restart negotiations to finalise the long-delayed Solvency II rules to make sure insurers hold enough capital to stay stable.

Tidjane Thiam, chief executive of British insurance giant Prudential, said it was also important to have a "realistic" timetable for phasing in the new rules once finalised.

"Getting this wrong will have real consequences for our economy and for jobs, for growth and how we deal with an ageing population," Thiam told the Association of British Insurers, which he chairs.

He warned that getting Solvency II wrong would jeopardise the flow of capital in Europe.

"The risks if we get this wrong are very high... Regulation cannot be developed in a vacuum," Thiam said.

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