A special task force at CEIOPS has been debating rule changes of crucial importance to big annuity writers like Legal & General, Prudential and Aviva, with the aim of making the rules consistent with the overall insurer capital rules known as Solvency II.
The task force unveiled its long-expected report to the European Commission covering the so-called 'liquidity premium', which would limit insurers' regulatory capital costs on their commitments to annuity customers in times of market stress.
'CEIOPS' members are still divided on the question whether a liquidity premium should actually be applied to insurance liabilities, even if limited to the situation of a stressed liquidity position,' CEIOPS Chairman Gabriel Bernardino wrote in a cover letter to the report.
The members of CEIOPS, or the Committee of European Insurance and Occupational Pensions Supervisors, include insurance supervisors from around the EU, such as Germany's Bafin or Britain's Financial Services Authority.
The European Commission will use the report in drawing up implementing measures for the solvency rule changes, which will be tested by insurers around the EU in the coming months.
(Reporting by Jonathan Gould; Editing by Michael Shields) ($1=.6713 Pound) Keywords: INSURANCE/REGULATION (Reuters Messaging: jonathan.gould.reuters.com@reuters.net; +49 69 7565 1242) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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