* EIOPA to bring in parts of Solvency II from 2014
* Gives watchdogs, companies experience before rules start
* Guidelines won't touch quantitative "Pillar 1" elements
* EIOPA chair sees Solvency II intro at earliest in 2016
By Jonathan Gould
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, adding that national supervisors should have these rules in place by Jan. 1, 2014.
"We want to help supervisors and insurance companies to move toward Solvency II," Bernardino told reporters.
EIOPA and the European Commission have been worried that national regulators 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 insurance products with long-term guarantees, such as many German life insurance contracts.
EIOPA will begin an impact study in late January on how Solvency II affects these guarantees and the study's results, due in late June, may determine if the rules need further big changes.
Bernardino repeated his expectation that the full package of Solvency II rules, which are set to bring sweeping changes to risk management in the insurance sector, could only take effect in 2016 at the earliest, given the political wrangling.
"If the discussions continue beyond 2013 then even a 2016 start will be in question but that's something we cannot forecast right now," he said.
The guidelines, which EIOPA will finalise after a public consultation in the spring of 2013, will cover the system of governance, including risk management systems and a forward looking assessment of a company's own risks, pre-application of internal capital models and reporting to supervisors.
The Association of British Insurers on Thursday said it wanted practical solutions from EIOPA given the uncertainty insurers are facing over unresolved aspects of the rules.
"There is a risk EIOPA over-reaches itself if its approach requires insurers to bring in Solvency II capital requirements and balance sheets ahead of time," said Hugh Savill, Director of Prudential Regulation at the ABI, which represents insurers like Prudential, Aviva and Legal & General, among others.
"Pressing ahead with early Solvency II reporting requirements would be an extra unnecessary burden on the industry," he added.
Bernardino said it was too early to talk about specific points to be brought forward, ahead of the public consultation.
EIOPA's interim guidelines would not touch on the quantitative capital adequacy requirements known as "Pillar 1" under Solvency II, such as technical provisions, he said.
"We will not impose any elements that go beyond what we can do in the process (as it stands) right now," Bernardino said.
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.