* New EU rules come into effect January 2016
* Insurers to get more flexibility than regulator wanted
By Huw Jones
LONDON, Nov 13 (Reuters) - After years of delay, theEuropean Union on Wednesday agreed new rules which will from2016 force insurers to hold enough capital to keep policyholderssafe.
Lawmakers from the European Parliament and officials frommember states met in Brussels on Wednesday.
"It's a good deal for the EU and for insurers," said SharonBowles, a British Liberal Democrat lawmaker, who took part inthe negotiations.
The 8 trillion euro ($10.72 trillion) industry is likely towelcome and long-awaited clarity after major firms includingAllianz, Aviva, AXA and Generali have invested millions of euros in preparation,including on IT systems.
Thirteen years in the making, the EU approved a version ofthe rules in 2009 and had been due to come into effect in 2012.
But disagreements between EU lawmakers and member statesover how much capital firms must hold to cover products offeringguaranteed returns over a long period have forced the bloc todelay the start date several times and amend the law before itcould even take effect.
The outline of a deal emerged last month after member statesput forward an alternative, weaker version of a compromiseproposed by the bloc's insurance regulator on products withlong-term guarantees.
Bowles, who chairs the European Parliament's influentialeconomic and monetary affairs committee, said the "calibrations"set out in last month's member state package were kept.
This gives insurers a far more generous shield againstmarket swings when it comes to calculating capital levels, knownas a volatility dampener, than the regulator had proposed.
Insurers will get far more flexibility in how they treatswings in credit spreads than the regulator had wanted, anelement known as matching adjustment.
Some elements will also be phased in over a much longerperiod than the regulator had proposed.
The deal on Wednesday meets the concerns of influentialcountries such as Germany, Britain and France, which werecrucial for an agreement.
Efforts underway at the global level to agree on the world'sfirst common insurance capital standard meant that failure bythe EU to agree on Solvency II would have made it harder for thebloc to influence that process in a credible way.
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