Securing all 27 signatures on Omnibus II wording remains a challenge
European regulators have three months to hammer out the ground rules for Solvency II if insurers are to have enough time to prepare for the implementation of the directive in 2013, the ABI has warned.
A draft version of Omnibus II, the document outlining the framework for Solvency II, is still being debated by the European Council of Ministers. It will then still have to be ratified by the European Parliament.
But securing all 27 member states’ agreement on the wording of Omnibus II continues to be difficult.
An ABI spokesman said insurers need to have a draft ready within three months to guide insurers in preparing the bespoke internal models that will determine how much capital they must set aside on their balance sheets. “The internal models will take a year for the regulator to sign off,” he said. “We haven’t got much time to take things on trust.”
The ABI is also worried that the transitional measures – notably those prohibiting insurers from holding certain types of capital – will spark a fire sale of such assets.
Concerns over the industry’s readiness for Solvency II were heightened by a Deloitte survey this week, which shows that only 46% of UK insurers think the industry will be ready for the planned Solvency II implementation date of 1 January 2013.
It also demonstrates 40% of firms have less than 40% of the staff they need to comply with Solvency II.
Deloitte insurance partner Francesco Nagari said: “If you have only a half or a quarter of the resources you need in order to be compliant, that will have a major impact.”