New regime "unprecedentedly complex and challenging process"

The EU’s new Solvency II regime poses stiff challenges for regulators across Europe, according to a new report.

The audit of supervisors’ preparedness for the introduction of the revised insurance directive, carried out by Ceiops (Committee of European Insurance and Occupational Pensions Supervisors), describes the implementation of Solvency II as “an unprecedentedly complex and challenging process in the area of insurance supervision.”

The report by the umbrella body for EU member state regulators, which is based on a questionnaire of supervisory authorities, says that one of the main challenges is to develop staff with the skills to police the new risk-based regime.

But it says that implementation of Solvency II is well underway in all surveyed supervisory authorities, although the level of preparation differs between regulators. .

And supervisors’ transition to the new solvency framework is proceeding at an increasing pace, demanding increased resources and often resulting in reorganisation. It says even that those regulators, which currently use a Solvency II-style system of risk and principle based supervision, will have to change the way they work.