Widespread calls from within the European insurance industry to delay the implementation of the Solvency II regulatory regime scheduled for 1 January 2013 are starting to receive solid political backing.
The latest support for a delay comes from the European Parliament’s Committee of Economic and Monetary Affairs which has called for implementation of Solvency II to be pushed forward to 1 January 2014.
The parliamentary committee’s proposal follows a similar call in late-June from the Council of the European Union (CEU) for a 1 January 2014 implementation date.
The CEU said it believed insurers needed more time to adjust to the new capital adequacy and risk management requirements.
Professional services firm Pricewaterhouse-Coopers (PwC) noted that CEU’s call for a delay was the first to be made by any European Union policymaker and represented a significant divergence from the position held by the European Commission.
PwC global Solvency II leader Paul Clarke said: “This is a positive development as it brings us closer to ending the distracting debate over whether there will be a delay.”
Also praising the proposed delay was Gez Llanaj, financial services consultant at information technology group SAS UK.
“The latest position from the European Parliament on postponing the Solvency II start date provides another reality check regarding the readiness of the industry and regulators,” said Llanaj.
“The proposed delay will enable insurers to adopt Solvency II as an opportunity to drive business benefits instead of being rushed to achieve compliance only.”
Clarke noted that, despite a possible delay to the implementation date, insurers cannot afford to be complacent with their plans. They will still be required to file Solvency II information during 2013 to prove readiness.
“This means insurers will need to have the appropriate systems and processes in place by the end of next year,” Clarke said.
Echoing this view, Llanaj said: “Insurers have a lot more to do in the next two years to embed Solvency II in their business decision process, planning, and strategic developments.
“Most insurance firms are in the middle of such transformational programmes. They are deploying a single Solvency II framework as well as addressing critical issues not clearly addressed in the first stages of the programme.”