STOCKHOLM Feb 18 Sweden's financial watchdog -
which has taken a tougher stance on its banks than other
regulators - said on Monday it would implement core new European
solvency rules for its life insurers by the end of 2013.
The Solvency II regulations aim at better protecting
consumers by driving insurers to improve their risk management
operations and more closely match capital reserves and risks.
Sweden's move should help improve insurers planning
certainty until the overall Solvency II EU rules are brought
into force, which is not expected before Jan. 1, 2016.
Part of the new solvency rules involve a so-called discount
rate which is used to set how much money life insurers must hold
to cover liabilities to policy holders, and which has been a
sticking point in talks among the insurance regulators and
politicians shaping the new rules.
Sweden's Financial Supervisory Authority (FSA) introduced in
2012 a temporary floor on that rate for life insurance firms and
pension funds as it waited for Europe's new Solvency II rules to
be finalised, helping them avoid being forced into equity asset
The FSA said on Monday its temporary floor - due to expire
on June 15 - would now be extended until the end of the year,
after which a new discount rate based on the wider European
agreement would come into force.
The EU's insurance regulator, the European Insurance and
Occupational Pensions Authority (EIOPA), is testing the impact
of the Solvency II rules on firms offering long-term insurance
products, and will report in June.
Sweden's financial watchdog has already required its banks
to hold higher levels of capital than their European rivals.
Swedish banks are today some of Europe's best capitalised.
(Reporting by Mia Shanley and Daniel Dickson, additional
reporting by Jonathan Gould in Frankfurt; editing by Ron Askew)