Europe’s progress on insurance reform is “shocking” and the costs involved “staggering”, according to UK Prudential Regulation Authority CEO Andrew Bailey.

The European Union’s (EU) proposed Solvency II regulatory regime has stalled, with no timetable for implementation, he writes in a series of letters released by the British Parliament.

“In particular, it is unclear to us that the French authorities will now be able to agree to any directive we consider prudentially acceptable,” he says.

Germany is supportive but needs a transition of 10 years or more to allow its industry to adjust, according to Mr Bailey.

The proposals will also be a major change for Italy, he says.

Solvency II introduces EU-wide regulations including stronger capital adequacy and risk management requirements.

Current EU minimum “safety and soundness” standards fall below those put in place in the UK in 2003, Mr Bailey says.

The regulator’s criticisms have been backed by the British Parliament’s treasury committee Chairman Andrew Tyrie.

“For the best part of 10 years [Solvency II] has been mired in uncertainty, at great cost to the regulators, insurers and, ultimately, consumers,” Mr Tyrie said.

“It is an object lesson in how not to make law.”

The Prudential Regulation Authority became responsible for UK insurers, banks, building societies, credit unions and major investment companies on April 1.