London MEP fights EU rules to save the Pru
A London Conservative MEP has spoken out today against EU plans which could devalue British pensions and force major insurance companies to move abroad.
It was reported today that the UKs biggest insurer, London-based Prudential, might move its headquarters to Hong Kong if the EU introduces measures to force insurance companies to hold millions of pounds in extra capital.
Such moves would also lead to a massive hike in premiums or an equally severe collapse in pension values. Conservative MEPs are trying to avert the crisis by amending the proposals to recognise the specific nature of annuity pension investments in Britain, which rely heavily on long-term and low-risk financial instruments.
Marina Yannakoudakis, Conservative MEP for London, said: An exit by one of the countrys oldest insurers from the UK would be a severe blow to the financial services industry in my London constituency.
Like so many other EU regulations, the Solvency II directive is overly-prescriptive, unnecessarily complex and is ultimately preventing insurers from growing. An open and transparent single market for insurance should be the goal and there are doubts that Solvency II can achieve this in its current form. I hope that the version of directive which comes before the European Parliament in April contains the necessary concessions to prevent an exodus of insurers from London and the rest of the UK.
Ashley Fox MEP, Conservative negotiator on the proposed measures, said: We have supported some of the principles of Solvency II, but we must ensure the detail is right for Britain. If we do not get this legislation right, insurance companies will be forced to hold millions in extra capital to cover themselves against a risk that does not exist. The extra financial burden could force successful companies abroad and push struggling ones under.