EU regulatory reforms to cut retirement income 20pc Legal & General, a vocal critic of the rules, will report a week later alongside Standard Life and Prudential. Insurers claim the new rules will force them to cut payouts to pensioners by bet­ween 10pc and 20pc. They say the rules will punish an industry that remained well capitalised throughout the financial crisis, compared to banks. The March 21 vote will consider amendments to Solvency II and provide clarity on when the Europe-wide rules will be introduced. Insiders say they are likely to be phased in between the middle of next year and January 1 2014. The news comes alongside a separate report by accountancy company KPMG, which warns Solvency II could "negatively affect the pensions market and wider economy" in some European countries. Phil Smart, UK head of Solvency II at KPMG, said: "In the UK, this could mean that the return on annuities falls to a level which consumers find unacceptable. Insurance firms may then decide such business is uneconomical. This in turn would be unwelcome news for pensioners, who could be forced to accept the investment risk on their pensions savings, as insurers will increasingly be expected to offer unit-linked pension products. Last weekend, Prudential confirmed it was considering moving its headquarters to Hong Kong to avoid the full impact of the regulations. However, the move is not believed to be its favoured option and the company will continue to meet politicians and regulators ahead of the introduction of Solvency II. One of the company's main concerns is how the capital rules will affect its overseas businesses. Last week, the Association of British Insurers (ABI) warned that the European Union must do more to make sure proposed new capital rules do not prevent insurers competing globally. Potential surcharges could arise if EU regulators decided capital rules for insurers in the United States, where Prudential has a large operation, were less exacting than Solvency II. "We want to see third country equivalence move up the agenda in the months to come," Otto Thorsen, director general of the ABI, said. Mr Balz was unavailable for comment.