LONDON, March 15 (Reuters) - European Union insurers are set to be spared the full impact of tough new capital rules for the industry, potentially saving them billions of euros, thanks to a last-minute agreement on Thursday between senior lawmakers.
Under the proposed deal between the European Parliament’s two biggest parties, a package of measures easing the capital requirements for insurers will be reinserted, with some alterations, into draft legislation in time for a key vote next week.
Lawmakers had omitted the measures from a compromise proposal that was to have been voted on by the assembly’s Economic Affairs Committee on March 21, drawing criticism from insurers, with one industry source describing the document as a “complete non-starter.”
Experts say it will be harder for insurers to influence the shape of the rules, known as Solvency II, after the vote, as the proposals then become the subject of complex three-way talks between the European Parliament, Commission and member states.
The measures agreed on Thursday will shield insurers from the capital impact of market fluctuations and provide added protection to policyholders, Peter Skinner, the British socialist member of the European Parliament, told Reuters.
“The sovereign debt crisis in the euro zone could have been exacerbated without this deal,” he said.
“Insurance companies would have moved away from holding sovereign debt without these measures in place, but there are safeguards also in place for policyholders that any temporary adjustments are in line with their expectations.”