Michel Barnier proposes one-year extension

The European Union (EU) could delay Solvency II again due to debates between European countries over the regulations.

Michel Barnier, the EU commissioner responsible for regulation, suggested a one-year delay to Solvency II, according to Reuters’ sources.

Barnier’s spokesman said the EU boss had called for an impact assessment of Solvency II by March 2013, but that this meant a delay to the January 2014 start date was possible.

European insurance and reinsurance trade body Insurance Europe said the impact assessment was a good idea, but added: “It is regrettable that this may lead to a delay in the Solvency II process, but it is vital that the results of the tests can be reflected in Omnibus II in order to ensure that the new regulatory regime is both appropriate and workable.

“The decision to carry out the assessment shows that legislators have recognised that measures are needed to ensure that the Solvency II framework measures the real risks faced by insurance companies’ long-term business and does not create artificial volatility.”