FRANKFURT, Aug 3 (Reuters) - Germany could quit talks on newrisk rules for Europe's insurance industry if regulators try toimpose a 'one size fits all' deadline for insurers to adapt tothem, a senior official at financial watchdog Bafin said.
"If someone forces us to stick with an inflexible timeframefor the phase-in because of some purist ideal ... we would inthe worst case just say goodbye," Felix Hufeld, Bafin's head ofinsurance supervision told the Wall Street Journal Deutschlandin an interview published on its web site on Saturday.
He echoed concerns voiced by German insurance trade bodyGDV, which has said a proposal to give insurers seven years toadapt to the new rules - called Solvency II - was insufficient.
Solvency II aims to protect consumers better by pushinginsurers to improve risk management and match capital reservesmore closely to risks.
"We shouldn't forget that all these regulatory changes aretaking place in a low interest rate environment. Every now andthen you have to ask how big of a burden a company can evenshoulder," Hufeld said.
Big insurers such as Allianz, AXA,Generali, Aviva and Legal & General are considered to be well prepared for Solvency II'srisk-management requirements.
Some smaller insurers, however, could struggle to shoulderthe additional administrative burdens.
Hufeld said it should be decided on a company-by-companybasis how much time insurers will get to adapt to the rules.
"Of course, no insurer can just say it needs 20 years toadapt if we can see in its numbers that it's really only 10years. We will monitor that, of course. But we also want toavoid an insurer toppling just because it complies with newregulation," he said.
Solvency II was meant to be in force by now but was delayedafter Britain, Germany and France called for a rethink over howproducts that offer guaranteed returns over the long term aretreated to avoid overly burdensome capital requirements.
Talks between the European Commission, the EuropeanParliament and national governments are due to resume inSeptember.
Hufeld said it still appeared "absolutely realistic" thatSolvency II will launch on Jan. 1, 2016, as now planned. InJanuary, Bafin head Elke Koenig had said she saw Jan. 1, 2017 asa more realistic start date.
Germany's big insurers have already invested millions ofeuros to get ready for the start of Solvency II, Hufeld said."They are practically working on this day and night."