The European Commission has been warned that it should resist introducing a new regime for insurance companies until it receives the appropriate standards from the International Accounting Standards Board.
Signs that the commission would move forward without the IASB sparked opposition from accountants and insurers, who want to ensure the new system, known as Solvency 2, and the IASB standard insurance contracts remain closely aligned.
G‚rard de la Martiniere, president of the Comit‚ Europ‚en des Assurances, which represents insurance companies across Europe, warned the commission that new rules on solvency should not be developed ‘without the formation of specific accounting standards for the insurance industry’.
He added that solvency and accounting standards needed to be introduced in convergence. ‘We can’t have one without the other,’ he said.
The commission has grown impatient waiting for the IASB to develop the second phase of a standard for insurance, prompting Karel Van Hulle, head of the commission’s insurance and pensions unit, to suggest last week that it may move ahead on its own. Van Hulle said the commission would base its system on what it thought would be the IASB’s likely outcome.
Ian Dilks, chairman of PricewaterhouseCooper’s European insurance group, said: ‘We have had no insurance accounting standard for 200 years. It seems a shame to rush ahead for the sake of a few years.’
IASB board member Gilbert G‚lard said: ‘We are not going to be drawn by regulators’ standards.’
He said there were more than 50 different regulators in the countries where IASB standards are used, ‘so which one do we follow?’
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