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.
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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.”
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By GlobalDataAlso 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.”
