The Insurance and Occupational Pensions Authority’s decision to schedule a stress test during the implementation of Solvency II has been questioned by ABI.
Eiopa announced details of the test earlier this week, with the programme to be carried out between the end of March and the end of May this year.
However, Peter Vipond, director of financial regulation and taxation, at the ABI claimed that the test could stretch insurers too far.
He said: “The UK insurance industry is currently under great pressure to implement an enormously complex regulatory framework.
“Rather than demand stress tests on the basis of a yet to be agreed framework, it would be better to focus on finalising the proposed rules and helping the industry put the infrastructure in place to make them work by 2013.
“We are also worried that many firms could be now be stretched as their technical teams will also be preparing internal models for use ahead of Solvency II at the same time as the stress test will run.”
The stress test will be run through the FSA in the UK. EIOPA expects to publish the aggregated results of this exercise in July 2011.