- FSA confirms assumed Solvency II ‘switch on’ date for firms of 1 January 2014
- No comment yet regarding the rules that will apply in 2013
KPMG today welcomed the FSA’s announcement that it has revised its assumed implementation dates for Solvency II in light of European discussions on Omnibus 2. The FSA’s new assumptions are that supervisors and EIOPA (the European Insurance and Occupational Pensions Authority) will gain their Solvency II responsibilities on 1 January 2013, but that firms will not have the rules ‘switched on’ for them until 1 January 2014. This is consistent with the latest positions of the European Parliament and European Council.
Janine Hawes, a director in KPMG’s Solvency II technical group, commented: “This is good news for firms seeking internal model approval, as the FSA internal model application window will now be open from 30 March 2012 to mid-2013. This will give firms greater flexibility around their implementation plans, but they will need to liaise closely with the FSA to ensure they enter the process at a point which best suits their programmes.”
While the FSA statement gives an overview of what this means in terms of application windows for FSA approvals, it is silent on the requirements that firms will need to comply with in 2013, in particular relating to the FSA’s individual capital assessment (ICA) requirements.
“The ICA is an FSA specific requirement, which is in some respects a forerunner of the Solvency II capital requirements. As such, it is within the FSA’s remit to modify these rules. Many in the insurance industry would like to see the FSA drop this requirement for 2013, allowing firms to report instead on a Solvency II basis. This may be an option for those firms that enter the internal model application process early, and hopefully receive approval on 1 January 2013. However, it seems unlikely for those firms not submitting their application until 2013. A decision on the ICA requirements in 2013 could influence firms’ plans and we would welcome FSA clarification on this aspect as soon as possible.”
The FSA has said that it will contact firms in the coming weeks to discuss what this means for their implementation plans and will run a seminar for smaller firms on 20 October to provide an update.
ENDS
For further information please contact
Monica Fiumara, Senior PR Manager, KPMG
Tel: +44 (0)20 7694 5674
Mobile: +44 (0)7901 105180
Email: monica.fiumara@kpmg.co.uk
KPMG Press Office: 020 7694 8773
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
