6 September 2013
The European Parliament has delayed the plenary sitting on Solvency II changes from October this year to 3 February 2014.
In a widely anticipated move, the Parliament pushed forward the debate to a period that is typically taken up by heavy electioneering ahead of EU elections in May.
The vote itself – which insurance watchdogs hope will unblock the impasse on Solvency II – has been postponed to 11 March 2014.
National regulators and lobbyists have been wrangling over an assessment of long-term liabilities issued by the European Insurance and Operational Pensions Authority (Eiopa) in June.
Analysts and MEPs have said that a positive vote rests on the German regulator BaFin, which is pressing for a 20-year transition period – something that will be resisted by UK negotiating parties among others.
Commenting on the vote delay, the European head of Solvency II at KPMG Peter Ott said: “It needs to be recognised that there will be no single universally accepted solution to the long-term guarantee issue, and political compromise must be reached quickly if Solvency II is ever to be finalised.”
Solvency II rapporteur and British MEP Peter Skinner has previously told this publication that amendments should be passed before May 2014 – when a wholly new set of MEPs unfamiliar with insurance regulation are likely to enter the European Parliament.
KPMG’s UK insurance director Janine Hawes said: “Industry has pushed back hard on the proposals around disclosure in particular, reflecting the challenges of providing numerical information before the basis for determining insurance provisions is finalised.”
Solvency II rules on disclosure come into force on 1 January 2014, and Hawes stressed the need for national regulators to finalise them with haste.
“Politicians now need to move forward quickly with a second ‘quick fix’ directive to delay the switch-off of existing directives, which will otherwise happen on 1 January 2014,” she said, adding that this would give insurers some much needed clarity.
