Solvency 2 has become a moving target and getting that target in their sights is costing insurers a fortune. That was the unequivocal message delivered to the All Party Parliamentary Group on Insurance & Financial Services yesterday.

As the group chairman, Jonathan Evans, observed in setting the scene at the beginning of the meeting, Solvency 2 has suddenly become a political issue following the Prime Minister's intervention over the threat by the Prudential to relocate to Hong Kong, a threat the company reiterated yesterday when reporting its results. This is a serious and understandable threat in the face of the proposed treatment of non-EU (especially US) risks, a point that was emphasised by Sean McGovern, director of North America and general counsel of Lloyd's, speaking to the group yesterday. The 85 syndicates currently operating at Lloyd's have almost half of their business in the US and Canada, he said, and many will have to consider moving to non-EU domiciles such as a Bermuda if the regulations are not amended.

This is not just an issue for British insurers as several major European groups such as Aegon, Axa and Allianz have also raised the same issue and are putting pressure on the Brussells bureaucrats to think again. The trouble is a re-think will take time and will probably delay the introduction of the Solvency 2 regime still further, adding significantly to the already painful costs. It has already been delayed once – pushed back from January 2013 to January 2014 – but even this new deadline is starting to look optimistic. The next hurdle in the European Parliament (pictured) just before Easter looks daunting: there are over 400 amendments tabled to the detailed regulations required to activiate the regime and if these are not all dealt with then the implementaion date will start to come under pressure. This is before you throw in having to deal with the question of non-EU liabilities and the intense lobbying from the French mutual sector which is seeking significant exclusions from the new regime.

The costs are already causing huge concern, as Martin Shaw, chief executive of the Association of Financial Mutuals, told the group. At an estimated £2bn for implementaion alone this represents £10 per policy for every policyholder, a cost that cannot be justified, he argued, especially in the UK. "The UK's previous approach was based on successfully pursuing a more risk based approach than the rest of Europe...therefore UK consumers will see less benefit for their £10 per policy". It was, he said, "doing the same things in a more expensive way".

The consequences among mutuals could be more mergers, off-loading some books of business, a de-risking of investment portfolios, which could impact on the equity markets, and more sharing of costs, for example through the use of external actuaries.

Paul Clarke, Solvency 2 European leader for PricewaterhouseCoopers, the technical consultants to the group, attempted to put the cost into context, arguing that some of it would be "incurred anyway and will end up making businesses more efficient", citing Amlin as an example saying that processes had been improved and a refined reinsurance programme put in place as a result of the preparatory work done for Solvency 2.

While the UK regulators were generally praised for being supportive over Solvency 2, all the presenters agreed that the Financial Services Authority's proposals for non-executive directors was setting the bar too high. Mr McGovern said "they almost expect non-execs to train as quasi-actuaries" and this combined with the suggestion that even for smaller companies they should spend 35-45 days a year on board duties will "turn off potential non-execs".

Mr Evans said the All Party Group will be returning to the subject of Solvency 2 after the Easter recess when it hoped to hear from both the Association of British Insurers and the Prudential. Perhaps by then we might have a little bit more certainty on some of the detail and whether the revised target date of January 2014 remains realistic.

The All Party Parliamentary Group on Insurance & Financial Services started work at the beginning of 1991 and I recently reviewed its first 20 years for Post.

The world of parliamentary politics looked very different 20 years ago when the All Party Parliamentary Group on Insurance & Financial Services arrived on the scene. It wasn't just that there were another six years to go in the long years of Conservative government, or that there weren't any devolved governments and such widespread influence of the European Union in daily life. The insurance industry and the wider financial services sector had a patchy, if not downright poor, relationship with parliament.

The previous few years had seen several pieces of legislation passed that had an adverse impact on the industry and it was frequently the target of unjustified criticism from MPs and Peers. It was also suffering badly from the fall out from the years of scandal at Lloyd's of London, which directly affected more than 60 MPs and Peers who were still Names at the market. Led by vociferous critics like Conservative MP Tom Benyon, they were constantly berating the beleaguered insurance market.

The industry had friends in parliament, however, and they were quick to throw their weight behind the attempt to form a new backbench group to help the industry communicate with parliament better, none more so than the late Sir Robert McCrindle, who was to be elected the group's first chairman in January 1991. Sir Robert, or Bob, as he was universally known, was already a high profile figure in the insurance market, as he was the British Insurance Brokers' Association's parliamentary adviser.

Bob McCrindle, of course, had plenty of contacts on the Conservative benches in both the Commons and the Lords and recruiting from their ranks in a Tory-dominated parliament was never going to be a problem. More of a challenge was finding sufficient opposition members to conform to the rules about opposition representation in all party groups. This is where Post's reputation for always fairly covering the staff side of issues in the industry paid off.

Labour Peer Baroness Turner of Camden was a former trade union official in the sector, having worked at the Prudential and risen to be deputy general secretary of one of the larger unions representing staff in financial services. She saw the value of such a group and encouraged many Labour MPs and Peers to join. She served a deputy chairman from its launch until she stood down from that post after the May 2010 General Election, although she still remains a member.

So much for the background and history: what has the group done and how to assess its value? Its first and foremost aim was to improve communication between the industry and parliament. No one who has had any dealings with the group over the past decade and a half can doubt that it has achieved that, not merely through its own work by helping all the major trade associations and professional bodies understand the importance of good lobbying and how best to achieve results in the often fast running currents of policy formation and political debate.

The second chairman of the group was another Conservative MP -- and former insurance broker -- John Greenway. He took over when Sir Robert McCrindle stood down at the 1992 General Election and served until he too stood down last May

 "It is unthinkable now that there was a time when there wasn't such a group. It has provided a focal point for the industry," says Mr Greenway. "You can take any major issue that has faced the industry during the past 20 years and see that MPs and debates in both houses of parliament have been better informed because of the group: terrorism, both Irish and Islamic; flooding; regulation; employers' liability; Europe; home income plans; the compensation culture; and, more recently a myriad of regulatory challenges are all issues where the role the group has played has proved crucial."

One of the group's early triumphs was to persuade the government to set-up Pool Re when the commercial insurance market withdrew cover following the Baltic Exchange and Canary Wharf bombs in the early 1990s. This initiative was led by another of the group's founder members, John Butterfill - now Sir John - who also stood down last May.

Working in partnership with the Association of Insurance and Risk Managers, the group lobbied the Treasury, eventually convincing it that the market could no longer carry the huge property risks posed by modern terrorism and that a government-backed solution was the only way forward.

The group is more than just about acting as a lobbying point for the industry, however, Mr Greenway says: "The group acts as a focal point in parliament but it is very much about two-way communication. There have been many occasions when the group has been critical of the industry. I believe it has enabled the industry to understand where parliamentarians are coming from in a way that it didn't understand before."

He cites the severe flooding that affected large parts of the UK several times in the last few years as a good example of the value of this two-way communication. "The industry had to warn that it couldn't go on insuring properties in flood prone areas for ever. Previously, this would have brought storms of criticism from backbench MPs but the group, working with the Association of British Insurers, larger companies, the Chartered Institute of Loss Adjusters and damage management specialists, ensured that there was a proper debate and an adequate chance for MPs representing flood prone areas to hear first hand what the issues were. Equally, it gave those MPs ample opportunity to explain to the industry what their constituents needed in terms of policy coverage and claims support. The industry listened and acted."

This partnership undoubtedly helped turn the pressure back on the government to act to improve flood defences, a debate that will continue to rage for some years to come and has already been tackled by the group under its new chairman Jonathan Evans, a former trade minister and MEP.

The employers' liability crisis earlier in the last decade was another opportunity for the group to show the invaluable role it performs in ensuring that parliament is well-informed rather than mis-informed about such problems. It organised a series of meetings over six months at which employers, trade unions, insurers and brokers could come together - often in the same room for the first time - to explain and discuss the problem. Again, it is not hard to imagine how, just a few years previously, the insurance industry would have been portrayed as the big bad wolf in such a crisis, finding itself the subject of stinging and ill-informed criticism in parliamentary debates. The APPG, living up to its founding ambition of providing a better channel of communication, did much to ensure that this did not happen.

When required the group has produced in depth reports on key topics, helping to shape legislative and regulatory change in such areas as the Compensation Act and the operation of the Financial Ombudsman Scheme. Nowadays, many companies and organisations in the insurance and retail financial services sector see the group as their first port of call when they have important messages they want to get across to MPs.

Often the lobbying of backbench MPs and Peers goes hand-in-hand with discussions with ministers and civil servants as the industry has developed a sophisticated approach to lobbying that is far from the fragmented, almost shambolic, mess that was commonplace when the group started work in 1991.

The full article includes comment on the work of the group from leading figures in the industry.

I suppose it was inevitable that one of the long-standing members of the All Party Parliamentary Group on Insurance & Financial Services would be caught in the expenses scandal and it happened last night when the Daily Telegraph revealed that Sir Peter Viggers, Tory MP for Gosport, was being featured in this morning's edition for his excessive claims for garden expenses, including a floating duck house. In political terms, Sir Peter was summarily executed with David Cameron instantly telling him that he would not be standing at the next election after a 35 year career in Parliament. Whatever you think of the claims that is a huge personal blow to Sir Peter.