U.K. insurers have invested at least £3 billion ($4.5 billion) to be compliant with new European Union capital rules, known as Solvency II, that come into effect next month, according to an industry lobby group.
More than 400 U.K. firms are expected to be affected by the regulation that comes into force across the EU on Jan. 1, the Association of British Insurers said in a statement Friday. Under Solvency II firms will have to hold enough capital on their balance sheets to withstand a one-in-200-year shock, the ABI said.
Britain’s largest insurers including Prudential Plc, Aviva Plc and Legal & General Group Plc and 16 other firms have already had their internal capital models approved by the Bank of England. Others including Direct Line Group Plc and St James’s Place will use the regulator’s standard formula to assess risk under the law.
Most insurers are expected to disclose their Solvency II capital requirements when they report full-year earnings next year.
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