By way of European Parliamentary notice, it has recently been announced that the plenary vote on the Omnibus II Directive (which itself amends the Solvency II Directive and contains the proposed revised start date for the Solvency II Directive) has been rescheduled and will now take place on 2 July 2012 instead of 17 April 2012 as reported in our previous update.

This change was expected in order to align with the ECON vote on 21 March 2012 and to allow for sufficient time for the negotiations to take place between the Parliament, the Commission and the Council of Ministers.

It is important to note, that despite this delay, the Commission has stated that the overall implementation timetable for Solvency II remains unchanged, while the Central Bank stated that it is currently working on the following assumptions:

  • Solvency II will be transposed by Member States by 1 January 2013;
  • During 2013, undertakings will be required to report to national regulatory supervisors on their progress towards full Solvency II implementation. Companies will also be able to submit formal requests to national supervisors for specific approvals (eg. internal models, undertaking specific parameters, ancillary own funds) where it is intended to use these from the start of full implementation. It is anticipated that the specific requirements for companies in 2013 will be outlined when Omnibus II is finalised;
  • Solvency II will enter into force for all undertakings on 1 January 2014. The Central Bank has stressed that the phased implementation of Solvency II should not be interpreted as meaning companies have an extra year to prepare for Solvency II, and that 2013 should be viewed as a transition year between Solvency I and Solvency II.

ECON Report on Omnibus II

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published its consolidated report of compromise amendments for Omnibus II. The report sets out the European Parliament's proposal for the Solvency II Framework Directive ahead of its discussions with the European Commission and the Council of the European Union.

A full summary of the report is beyond the remit of this update, however it is worth noting that the report retains the proposed split implementation dates and phasing-in requirements for Solvency II. This, in a nutshell, means that the requirement that Member States transpose Solvency II into national law by 1 January 2013, along with the requirement that all companies comply with the Solvency II requirements from 1 January 2014, remain in effect.

ECON's report also sets out provisions relating to transitional periods along with a number of proposals relating to the requirements for equivalence of regulatory regimes (including an interesting five-year temporary equivalence provision, based on certain conditions).

While some commentators believe that the report is not comprehensive enough and may lack 'workable' solutions, one benefit of the ECON update is that it sets out in clear terms the European Parliament's framework for Solvency II ahead of the negotiations between the Parliament, the Commission and the Council of the European Union. These negotiations are due to take place over the coming months.

EIOPA voices concerns on Solvency II Timeline


By way of letter to the European Commission, the European Insurance and Occupational Pensions Authority (EIOPA) has voiced its concerns regarding the recent developments relating to Solvency II and, in particular, the delays in finalising the Omnibus II Directive.

In its letter, EIOPA stressed the importance of agreement on a clear timeline for the entry into force of Solvency II and it encourages the Commission, the European Parliament and the Council of the European Union to take steps to ensure that Solvency II comes into force in 2014.

EIOPA also noted that it is currently assessing how best to deal with the implementation delays in the context of its ongoing work in preparation for Solvency II, but went on to warn that continued delay could lead to Member States developing individual solutions to cater for preparation for Solvency II. This, EIOPA said would be contrary to a single harmonised approach and may hinder the aims of Solvency II.

In summary, while the effect of EIOPA's letter may not be evident for quite some time, as one of the core contributors to the Solvency II framework, its concerns are likely to be considered carefully.

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