Regulator says 10% of European insurers fail stress test

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About 10 percent of European insurance companies tested do not have enough capital to withstand exceptional economic shocks, results published by the sector regulator showed on Monday.

But with a success rate of 90 percent, the sector showed it was globally sound even in the most stressful situations, the European Insurance and Occupational Pensions Authority (EIOPA) said.

The tests examined 221 insurance and re-insurance companies which account for more than half of all premiums taken in in the 27 members of the European Union plus Iceland, Liechtenstein and Norway.

They incorporated stricter criteria for capital requirements that are to take effect in January 2013 under so-called Solvency II regulation but which have not yet been finalised.

© 2011 AFP

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