UK insurers warn against a phased implementation of the new law
The European Commission looks set to delay the full introduction of Solvency II by having a ‘soft launch’ of the directive in 2013.
Amid mounting concerns across the EU that regulators and companies will be unable to comply with the directive when it is due to come into force on 1 January 2013, internal markets commissioner Michel Barnier said last week that Brussells would allow a “soft transition” to the new regime.
Under a French government plan, the directive would be transposed on the target date, but companies would not have to meet their Solvency II capital requirements for another year.
But UK insurance industry figures warned against a staged implementation of the directive.
Ageas UK chief executive Barry Smith said: “There has been a lot of effort across the industry to meet the target date, so to have speculation and uncertainty over the timetable is not helpful. We are well advanced in our Solvency II project and on course for implementation by 1 January 2013. It would be very disappointing if that date were to now slip.”
Aon Benfield Analytics EMEA head Marc Beckers warned that UK-based insurers could lose out. He said: “UK-based group companies that have operations in other European jurisdictions might be at a little bit of a disadvantage because their capital requirements should be higher.
“If there is going to be a split approach, I think that is going to be very difficult and that is also why there will be a lot of resistance from the UK to such an approach. They will commit very hard to having 2013 as the starting date.”