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Reinsurers could be required to meet new Solvency II reporting requirements ahead of the scheduled 2016 implementation date, according to European Insurance and Occupational Pensions Authority (Eiopa) Chairman Gabriel Bernadino. In recent remarks, Bernadino said he didn’t believe Solvency II could be implemented before 2016, but he did think that reinsurers could be required to meet certain reporting requirements of the new regulation earlier. Bernadino’s remarks follow those of Dr. Elke König, head of the German financial regulator BaFin, who discussed the possibility of a "Solvency 1.5," where countries could adopt some uncontested elements of the new regime before the eventual implementation date.

The reinsurance industries have expressed dismay that the project has been pushed back and fear that the new regulations may never be fully implemented despite the huge costs already incurred to meet projected standards.

Malaysia’s latest fiscal budget included a strong indicator that implementation of the long-awaited goods and sales tax, based on the EU value-added tax (VAT) system, is near. The budget included a reduction in income tax of 1%, which experts say is a sign that the country’s tax system is straying from an income-generated system to a consumption-based system. The IMF recently recommended that Malaysia introduce a full GST regime, as it had one of the weakest balance sheets in the region.

Catastrophe modeler AIR Worldwide says that Superstorm Sandy could cause insured losses between $16 billion and $22 billion. The estimate includes wind and storm surge damage to residential, commercial and industrial properties, contents and automobiles, and time element coverage, like additional living expenses for residential properties and business interruption for commercial properties. 

The group noted that the increased estimate, up from the original estimate of $7 billion to $15 billion, is due to an increase in estimated losses from storm surge damage. In the revised estimate, AIR said that, among other things, its default assumption, which was used to generate insured loss estimates hours after Sandy's landfall, was that 10% of commercial structures carry flood insurance. Based on further investigation into how storm surge losses will be covered under Sandy, AIR now believes that a revised assumption of 20% is more applicable for this particular storm and region. 

The Colombian government is launching insurance to protect coffee farmers impacted by climate change, according to Reuters. The government says climate change has damaged output of high-quality Arabica beans in recent years. The past three years of bad weather and a recent slump in international bean prices are driving the government’s decision to broaden the financial instruments available to farmers, a policy long practiced by more developed Latin American markets.

Small growers in Colombia will have insurance to protect their crops from drastic weather changes, starting from January, said Andres Lozano, a top advisor at the Colombian agricultural development bank, Finagro.

The insurance plan will be financed with 30 billion pesos (around $16.5 million), of which 60% will be managed by Finagro, and will shield 96% of the country's 500,000 growers who have less than five hectares (12 acres) in coffee beans, officials said. The insurance will cover only those plantations damaged by hailstorms, landslides, excessive rainfall or extreme droughts and will initially have funding for a year, said the coffee federation's chief of marketing, Luis Fernando Samper.

Reuters reports that the U.K. is fighting government subsidies for insurance for households in flood-prone areas, derailing talks over the scheme and potentially leaving 200,000 homes without protection. The government has told insurers it will not provide an overdraft to the proposed fund, leaving talks over the plan deadlocked. The impasse comes amid renewed heavy flooding across England. A government refusal to provide a financial backstop has cast doubt over the plan, dubbed Flood Re, after months of negotiations.

An agreement in which insurers agree to cover a certain loss in return for a government pledge to boost spending on flood defenses expires in July, and the Flood Re scheme had been intended to take its place. Under Flood Re, consumers would pay a levy of up to 20 pounds ($32) a year into a fund that would cover claims from high-risk homes. The government would initially act as insurer of last resort to guard against an extreme flood that overwhelmed the fund, but taxpayer support would be withdrawn once the fund had accumulated enough cash to handle any likely flood on its own.

Taiwan’s government will pay TransGlobe Life Insurance T$88.4 billion (US$3 billion) to take over rival Kuo Hua Life after TransGlobe beat out other competitors for the country’s largest government bailout. Taiwan’s saturated life insurance industry has been hit by cutthroat competition, in part because Taiwan’s interest rates are among the lowest in Asia, prompting consolidation as foreign firms exit the market.   Kuo Hua Life has 1.4 million policyholders compared to Taiwan’s population of 23 million. Foreign firms exiting the market include AIG and ING Groep NV. British insurer Aviva has also said it will sell its stake in a joint venture with First Financial Holding Co.

China’s PICC Group is negotiating with AIG and others to becomecornerstone investors for its planned listing worth up to $4billion, in Hong Kong’s biggest IPO in two years.People’s Insurance Company of China Group (PICC), oneof the country’s largest insurers, is also meeting withFrench reinsurer SCOR, China Life Insurance Co. Ltd., andChinese state utility State Grid Corp. among others forcornerstone stakes, Thomson Reuters publication IFR reported.

About 50% of the IPO is covered by commitments fromcornerstone investors, including private financialinstitutions and government-owned companies. PICC will offer6.9 billion new shares in the IPO, equivalent to a 16.7%stake in the enlarged company. The IPO values the companybetween $20.8 billion and $30.5 billion. Asian insurers onaverage trade at 15.9 times forward price to earnings,Thomson Reuters data show.

Reuters reports that Hong Kong was named the world’s top financial center for the second year running by the World Economic Forum (WEF), thanks to the strength of its business environment, infrastructure and favorable tax regime. The WEF’s annual “Financial Development Report” considered a wide range of factors and underscored the rise of Asian trading centers and the influence of China as the world’s second-largest economy. Japan, Switzerland, the Netherlands and Sweden made up the remainder of the top 10 financial centers. The report said that policymakers face a “monumental” task to restore confidence in markets as waning trust in the overall system holds back investment.