Speaking at an all-party parliamentary group on insurance and financial services in the House of Commons, Skinner insisted that a resolution on equivalence had to be found that suited the market, consumers and regulators.
The issue of equivalence has long vexed European insurers who operate in North America, as the US and Canada have declared their intention not to apply for their respected regime to be treated as equivalent to Solvency II. If no way is found to accommodate these countries' own regulatory regimes within Solvency II's framework, European firms will be put at a competitive disadvantage to local insurers by potentially having to hold higher capital reserves to meet Solvency II's requirements.
Bruce Porteous, Edinburgh-based head of Solvency II and regulatory development at Standard Life, who was also speaking at the meeting, said: "If we get a bad outcome on equivalence it means it will be very, very difficult for European Union [EU] insurers to compete on a level playing field in markets like Canada and the US". The EU's approach to equivalence, he said, actively discouraged other jurisdictions from taking part in the process. "If you want to be equivalent to Solvency II then you need to apply for permission, send in an application form, [the EU] will judge you and, if [they] like you, will allow you in. It's a very high-handed approach to things", Porteous added.
Skinner said that the European Parliament was committed to completing the legislative process for Solvency II before the next EU elections in 2014. He was optimistic that once the European Insurance and Occupational Pensions Authority publishes its report on the long-term guarantees impact assessment (LTGA), the negotiations to finalised Omnibus II would proceed rapidly.
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