FSA: Solvency II costs UK at least £100m
Thursday February 10 2011 | 06:22 AM

The UK Financial Services Authority says that Solvency II is likely to cost the regulator around £100m to implement in the UK and that this is "towards the low end" of their original estimates.

Speaking at an Insurance Institute lecture in London on Wednesday, FSA chief executive Hector Sants acknowledged that there are "considerable direct implementation costs" which are being borne by the insurance industry, both directly and through the FSA, which recovers costs from the industry.

Sants said the FSA will be laying out a cost-benefit analysis in the next year but that it will make little difference as the directive is already agreed.

He also urged the UK financial services sector to engage with the new European Insurance and Occupational Pensions Authority, the European Commission and the Parliament, saying it is "vitally important" that the industry does so.

The FSA is represented on the inaugural Management Board of Eiopa and Sants said he would be investing "significant effort" including his own personal time into engaging with insurance issues at a European level.

He said: "I am sure it is apparent through the Solvency II process that well articulated pan-European industry input is carefully listened to and can influence policy-making. It is vital that the UK organises itself to contribute fully to such initiatives."