She said: “Parliament is keen that we have an arrangement that doesn’t put the European insurance industry at risk, so they want to have these temporary equivalence arrangements.
“The Commission is less keen on these and doesn’t want to have something open-ended; they want an end date in place. You can’t just say, ‘This is the standard and everyone else has to fit to it’ because not everyone wants equivalence. When Canada said it wasn’t seeking equivalence that was a wake-up call.”
After heated discussion from the opening speakers, the topic of debate moved to how Solvency II would affect annuities, which was discussed by a group of three panellists, led by the ABI’s assistant director of prudential regulation, Jon de Beer.
Mr de Beer began by warning that numerous issues still stand in the way of making Solvency II work for the UK market and that there was little time left to iron out the remaining potholes.
He said: “Level 2 will be very tricky. There is no appetite from institutions to reopen discussions and the timeline doesn’t leave a lot of space in trying to influence the process. Parliament’s power at level 2 is only to accept or reject. It does not get to amend it.”
Mr de Beer said it was “fundamental” to prioritise and focus on what could be realistically changed at this late point.
Fellow panel member Jim Rasque, policy adviser for prudential regulation at Insurance Europe, acknowledged the difficulties faced in finding a EU-wide compromise and the latest proposals’ lack of perfection, but eased concerns by emphasising the presence of a review clause.
He said: “There is a review clause in the text so we wouldn’t expect it to be forever. We can potentially do some refinements and it is a work that will not stop. It is a delicate balance.”
Both Mr Rasque and the final panellist, Carl Dowthwaite, struck another blow when warning that Solvency II, for all its improvements, may still stifle product innovation.
Mr Dowthwaite, group commercial actuary for Legal & General, responded: “I fear it may affect the scope for innovative products and could make it hard for firms to deviate from the standard patterns.”
After lunch, and the opportunity to digest a barrage of mixed opinion, play resumed with a five-man panel dedicated to addressing interim measures.
Most vocal in this group of delegates was David Innes, the head of economic capital at RSA, who openly-criticised the ambiguity of the proposals before adding that “one recipe” was never likely to function harmoniously across the Continent.