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Doubts cast over 2012 Solvency II implementation timetable
Practical Law UK Legal Update 9-502-2144 (Approx. 2 pages)
Doubts cast over 2012 Solvency II implementation timetable
by Laura Hodgson, Norton Rose LLP
| Published on 04 May 2010 |
This article is part of the PLC Global Finance April 2010 e-mail update for the United Kingdom.
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Solvency II will radically change the supervision of insurers and reinsurers across Europe. The Solvency II Framework Directive, which was adopted by the European Council on 10 November 2009, requires the provisions of the new regime to be in force by the end of October 2012. However, recently published draft minutes of a meeting of the European Insurance and Pensions Committee (made up of the finance ministers of member states) have suggested that the coming into force of the Directive may be delayed until the start of 2013.
Solvency II will radically change the supervision of insurers and reinsurers across Europe. Under the Solvency II Framework Directive, existing insurance directives will be amended and recast into the new regime which aims to introduce a consistent, risk-based, solvency regime which better reflects modern solvency and reporting requirements.
The Solvency II Framework Directive, which was adopted by the European Council on 10 November 2009, requires the provisions of the new regime to be in force by the end of October 2012.
However, recently published draft minutes of a meeting of the European Insurance and Pensions Committee (made up of the finance ministers of member states) have suggested that the coming into force of the Directive may be delayed until the start of 2013.
Should this delay cause any concern for insurers?
Probably not.
In fact, a number of concerns have been raised by the industry about the October 2012 date and many will be relieved by any delay in implementation. In particular, delaying Solvency II by a couple of months would allow the regime to come into force in alignment with the year-end of a majority of insurers and the Lloyd's of London coming into line process for the 2013 year of account.
The meeting from which these draft minutes were taken concerned the proposed Omnibus Directive, known as "Omnibus II". This (rather oddly named) European legislation will amend several financial services directives (including Solvency II) to ensure that the new European Supervisory Authorities (including the proposed insurance body, EIOPA) are able to work effectively.
To date, there has been no formal announcement of any proposed or actual postponement of Solvency II, but the publication of these minutes adds further weight to existing rumours.