EU Solvency II Deadline Extension Helps, But Insurers Still Scrambling

Insurers anxious about their preparations for compliance with Solvency II got a bit of good news yesterday, with the disclosure that the European Parliament supports a delay in implementation of the regulation until Jan. 2014, as reported by GFS News.

The draft text of the EU Parliament's Omnibus II - which provides delaying mechanisms for certain parts of Solvency II - includes the following language, at variance with the original implementation deadline of Jan. 1, 2013:

"Between 1 January 2013 and 31 December 2013 insurance and reinsurance undertakings and supervisors shall take all measures necessary to comply as of 1 January 2014 with the national laws, regulations and administrative provisions implementing this directive."

The proposed delay runs counter to earlier signals from European Commission internal market commissioner Michel Barnier, who implied that the insurance industry's pleas for a delay would not be answered.

The Omnibus II extension is a recognition of facts more than a generous concession. The Actuary quotes John O'Neill, consultant Barnett Waddingham's insurance lead:

"It is the only practical solution to accommodate European member states that are further behind the UK in terms of readiness for the changes."

The GFS News piece quotes PwC global Solvency leader Paul Clark saying that European Parliament has at least put to rest a "distracting debate" about extending the deadline. However, it shouldn't affect insurers' sense of urgency, he says:

"Despite the delay in start date, the reality is insurers cannot afford to be complacent with their plans, as they will still be required to file Solvency II information over the course of 2013 to prove their readiness. This means insurers will need to have the appropriate systems and processes in place by the end of next year."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio