New rules to bulletproof insurers in the European Union against financial crises will likely be delayed another two years because of continual disagreements over the final shape of the rules.Insurers had expected the Solvency II rules, scheduled to take effect in the EU in January 2014, to be put back a year because governments there can’t agree on how to calculate the amount of capital that should be held against life insurance policies.But now, there is mounting speculation that the regime, which is intended as a global benchmark for insurance regulators could be pushed back to 2016 or even later to give governments time to iron out their differences.Originally intended to take effect this month, the Solvency II start date had been pushed back to January 2014.The Bermuda Monetary Authority, which has applied for “third-country equivalence” with the new rules, indicated to The Royal Gazette last monththat would be sticking to the 2014 deadline while actively monitoring the EU’s timeline.Yesterday, the BMA said it was taking a closer look at the impact this most recent delay could have on Solvency II equivalence in Bermuda.“The Bermuda Monetary Authority (the Authority) understands that the timing of Solvency II implementation has been delayed until at least 2015, in order for the European Insurance and Occupational Pensions Authority (EIOPA) to conduct an impact assessment,” a BMA spokesperson said in a statement.“The Authority remains committed to its strategy of regulatory and supervisory enhancements for Bermuda’s commercial insurers. However, the Authority is assessing the impact of the Solvency II delay on specific elements of Bermuda’s framework for insurers. We will communicate any required revisions to our Roadmap to Regulatory Equivalence in the coming weeks.”Regulators for ten years have been working on the new Solvency II rules, amed at better protecting consumers by making insurers more closely match capital safety buffers to the risks on their books, but the details have proved difficult to finalise.“2015 could work, provided everything falls into place, but I suspect there are those who are weighing up whether it would be wiser to go for a two-year delay,” said Paul Clark, insurance partner at accountants PricewaterhouseCoopers told Reuters.British and Dutch insurers, who have a strong tradition of using risk capital models to steer their insurance portfolios, are seen to be ahead in preparations for Solvency II.However, a study by accounting and consultancy firm Ernst & Young has shown that 34 percent of German, 17 percent of Italian and 13 percent of Spanish insurers expect they wouldn’t be ready to fulfill Solvency II requirements until at least 2015.Last month, talks between EU governments, lawmaker and officials on how to set capital reserves for life policies were halted pending tests to gauge the impact of competing approaches, effectively putting the 2014 start date beyond reach.The tests finish in March next year, but with each government championing the method that favours its own insurers, there is no guarantee that the deadlock will be broken in time to meet a 2015 deadline, Mr Clark said.Analysts say the rules, first drawn up amid benign economic circumstances a decade ago, are too sensitive to the violent financial market swings seen since the 2007 credit crunch and could impose excessive capital strain on insurers.“We believe that the turbulent financial markets over the past five years have raised a lot of questions about the proposed framework, which could seriously penalise insurance companies,” analysts at stockbroker Cheuvreux wrote in a note.Insurance executives say the case for a longer delay is strengthened by the realisation that Solvency II could impose a heavy capital burden on the sector and threaten its investment firepower, which is needed to kick-start Europe’s flagging economy.The European Commission, the architect of the Solvency II project, last month asked regulators to make sure the new regime did not deter insurers from putting money into “growth and job-enhancing areas”.The new rules will probably not come into effect until 2016, Gabriel Bernardino, head of the European Insurance and Occupational Pensions Authority, the pan-European regulator, told the Wall Street Journal yesterday.In a letter to EU regulation commissioner Michael Barnier earlier this month, Mr Bernardino urged politicians to set a clear timetable for the project, saying delay was undermining EU credibility internationally.Big insurers are seen as better prepared for the rules than some smaller players, though many European insurers have said they would rather see the regime delayed than pushed through only to be amended later.