Insurers now under pressure to meet implementation deadline
The European Parliament, Council and Commission last night agreed on the contents of Omnibus II, a key package of changes to the Solvency II capital regime.
The agreement follows months of debate on Omnibus II’s contents, and paves the way for the implementation of the heavily delayed Solvency II.
Solvency II was agreed in 2009, with the Omnibus II directive intended to adapt the regulation to reflect developments such as the EU reforms in the Lisbon Treaty.
The directive will also address concerns over artificial volatility and pro-cyclicality created by Solvency II measures when tested in the 2010 quantitative impact study, QIS 5.
Lobby group Insurance Europe’s president Sergio Balbinot said: “Insurance Europe commends the EU institutions for reaching agreement on Omnibus II.
“It was important for Omnibus II – which updates the Solvency II Directive of 2009 – to be finalised now, as a great deal of work remains to be done on the technical details of the new regime before insurers and supervisors can be ready to apply it from the start of 2016,” he added.
Insurers will now have little time between the finalisation of the delegated acts and technical standards of Solvency II and the proposed application date of 1 January 2016.
PwC partner and Solvency II leader Charles Garnsworthy said: “Agreement yesterday between the European Council, European Parliament and Commission will give the market a degree of rule certainty, but will also allow European Insurance and Occupational Pensions Authority (Eiopa) to finalise its own drafting on delegated acts and regulatory technical standards.
“The compromise reached will not satisfy all parties entirely, however it will represent relief for many, especially now that the way forward has become clearer.
“The timetable is now clear. Eiopa’s guidelines become effective from January 2014 and there is a very real short term need to be prepared to deliver in 2014 and 2015. Firms should now take stock of whether their programmes are going to meet the requirements and prioritise those areas needing attention.”
Solvency II timeline
- Final trialogue on Omnibus II: 13 November 2013
- Vote on Omnibus II: February 2014
- Publication of Omnibus II: Spring 2014
- Publication of new delegated acts: August 2014
- New delegated acts made official: February 2015
- Implementing technical standards: Early 2015
- Internal modelling approval: April 2015
- Solvency II regulations come into force: January 2016