Is McCreevy losing the light touch?

Solvency II

Reaching agreement on updated rules on solvency for insurance companies is a key priority for the French presidency of the EU. The proposal for revising the directive will be discussed by EU finance ministers when they hold their informal meeting in Nice on 12-13 September. But obstacles are prompting doubts that agreement can be reached by the end of this year or early 2009 – the deadline for agreeing new rules to come into force in 2012.
The revision, aimed at more efficient regulation of insurance companies that have operations in more than one member state, is strongly backed by the industry. It would give supervisory authorities in the insurer's home state more powers over subsidiaries. But some central and east European countries fear this would offer too much advantage to the large pan-European insurance groups and their domestic regulators.
Opinions also differ over the assets that insurance companies are required to hold to meet solvency requirements. EU officials say the French presidency is pushing for other countries to adopt French-style rules for the treatment of equities as assets. This is strongly resisted by some countries, and officials warn that any agreement on a revision of the directive depends on a more flexible approach.