The man nicknamed “Mr Solvency II” said in Hamilton yesterday that he hoped Bermuda’s efforts to gain equivalency with the new European insurance rules would be successful.

Karel Van Hulle, who has spearheaded the development of new European Union insurance regulations, known as Solvency II, was speaking to an industry audience at the Bermuda Insurance Institute Christmas Networking Lunch at the Fairmont Hamilton Princess.

The Island’s insurance regulator, the Bermuda Monetary Authority (BMA), is striving to achieve regulatory equivalence with Solvency II to ensure that Bermuda-based companies doing business in Europe will not be competitively disadvantaged.

Mr Van Hulle was introduced at the podium by BMA chief executive officer Jeremy Cox, who described him as “Mr Solvency II”.

One of the reasons he had been happy to speak in Bermuda was that “we wanted to show our appreciation for the great efforts that have been undertaken here to move the Solvency II regime to the highest standards that we have today in the world”.

On Bermuda’s equivalency assessment, he added: “I hope we will conclude it with success.”

Mr. Van Hulle, who is head of unit insurance and pensions, financial institutions, for the European Commission, said: “I have three messages. Solvency II is coming; there will be more regulation in insurance following the financial crisis; and the insurance industry will ultimately gain from the unfortunate developments the financial sector has gone through over the past two years.”

The impact on the Bermuda market of Solvency II, scheduled to take effect on January 1, 2013, is a hot topic as the Island’s international insurance companies, many of which write business in the EU.

The new rules will have the effect of requiring insurers to hold more capital, and raise standards for corporate governance and transparency.

Mr Van Hulle said there had been widespread concern over Solvency II’s capital requirements, but that was not the main thrust of the new rules.

“Its emphasis is on good risk management,” Mr Van Hulle said. “What’s important is that companies who are expert in handling risks do so to the highest standards.”

And he touched on another concern about Solvency II, that the insurance industry regulations should not be tightened in reaction to the failings of the banks during the financial crisis.

“We need to avoid regulatory arbitrage in the financial sector,” Mr Van Hulle said. “We should not introduce the remedies for the banks into insurance. That could be counter-productive.

“The insurance industry was not the cause of the financial crisis, but the insurance industry has suffered from the crisis, because some insurance companies did not have good risk management.”