Market will submit model to FSA in July instead of April
Lloyd’s of London has delayed submitting its Solvency II internal capital model to the FSA by around three months to give managing agents more time to prepare.
The model was originally going to be submitted to the FSA for approval next month, but will now be submitted in July, according to a letter sent by Lloyd’s finance director Luke Savage.
Insurers can use their own internal models to calculate Solvency II capital requirements if they have been approved by the regulator for this purpose.
In the letter, Savage said: “I don’t expect that the revised timing of our submission to the FSA will have any material effect on the timetable for preparations in the Lloyd’s market, either at managing agent or corporation level.
“Our programme for 2012 remains unchanged in all other respects. The additional three months will give both managing agents and Lloyd’s time to complete any outstanding work in accordance with the original timetable as part of a transition to “business as usual” for 2013.”
Insurers are vying to have their internal models approved for use under Solvency II because it will result in lower capital requirements than using the standard Solvency II model. Those who lack their own capital models or who do not get approval in time will have to use the standard model.
Solvency II is scheduled to be implemented in 2014. The regulation passed a key milestone yesterday when an important package of changes, called Omnibus 2, was given the European Parliament’s seal of approval.