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Member, Beacon International Group, Ltd.
(Reuters) — Insurers in the Netherlands are ready for new regulations covering their financial strength and are applying them rigorously, the country's central bank said Thursday, potentially putting the industry ahead of European competitors.
De Nederlandsche Bank began applying Solvency II rules to Dutch insurers this year, even though they do not formally go into effect until Jan. 1.
The DNB said it had been applying a relatively "pure" form of the regulations, while some European countries are taking advantage of transitional arrangements that allow a 16-year migration to some aspects of Solvency II.
"Dutch insurers are well-prepared for Solvency II and are making relatively little or no use of these transitional measures," it said.
Shares in Delta Lloyd N.V. rose 9.6% to €4.71 ($5.18), while Aegon's were up 5.4% at €5.22 ($5.74) as investors interpreted the DNB remarks as an all-clear signal.
Shares in both companies sold off over the summer when they disclosed their Solvency II ratios were shaping up lower than the market had expected. Delta Lloyd shares are still down 75% so far this year, as it must raise fresh capital to comply with Solvency II.
The DNB did not name names, but said "some European countries" were making use of transitional rules "on a pretty large scale."
"When these transitional measures are used, solvency ratios are calculated as being higher," it said.
As a result, it may be difficult to compare Dutch insurers with other insurers until Solvency II figures are made public in 2017.