Brussels, 15/10/2003 (Agence Europe) - The Commission has decided to close the infringement proceedings into the regulation and supervision of the insurance company Lloyd's and its re-insurance company Equitas, as it feels that British legislation provides sufficient guarantee in terms of monitoring and solvency of the insurer. Further to complaints, the Commission sent an initial letter of formal notice to the British authorities in December 2001, on the implementation of Community legislation on insurance and life insurance. It wished in particular to be assured that the Financial Service and Markets Act (FSMA), which had just entered into force, respected European provisions on monitoring the solvency of insurance companies for all activities. A "supplementary letter of formal notice" was sent in January 2003.
At present, the Commission is "satisfied" by clarifications provided by the United Kingdom, which focus on the "Lloyd's Source Book" covering Prudential Requirements, Insurance Operational Risk, Margins of Solvency, Determination of Liabilities and Assets. It was also assured that self-regulation measures taken by Lloyd's were in line with British legislation.
Under the watchful eye of British Conservative Roy Perry, the EP's committee on petitions had taken on the defence of "Lloyd's Names", which had done particularly badly out of the company's losses in the 1980s. The MEPs called upon the Commission to intervene to ensure that Community prudential rules were being followed. An infringement ruling could have led to compensation for the victims.
In a press release, Frits Bolkestein says that "the Commission will continue to co-operate fully with Parliament in any deliberations it might undertake, subject to the respect of any legal constraints (...), in particular in relation to access to certain documents". He also stressed that any action for damages due to the incompatibility of the former British legislation with Community legislation should be addressed to the British courts.