- Both Council and Parliament propose a start date of 1 January 2014 with some reporting in 2013
- Firms still need additional clarity on deadlines and specific requirements to plan properly
The European Council has now agreed a position on Omnibus 2 as detailed in the accompanying paper to the redraft issued late last week.
This means the industry now has the starting points of both Council and the Economic and Monetary Affairs Committee (ECON), with both papers proposing that firms will need to comply with Solvency II from 1 January 2014, with a need for them to submit an implementation plan to their supervisor in 2013. However, the FSA has yet to comment on this.
Janine Hawes, a director in KPMG’s Solvency II technical group, commented: “Firms will be keen to understand what this means for the FSA timelines, especially in relation to the internal model approval process. So far, the majority of firms have pushed ahead with their Solvency II development plans and are justifiably keen to understand what this means for them in practice.”
With regard to upcoming Solvency II milestones, the European Parliament votes on the ECON proposals in December. This is likely to be followed in the New Year by a period of negotiations to resolve areas of difference before the level one text will finally be known. Shortly after that is resolved, the industry would expect to see the draft level 2 text from the Commission, followed by the release of formal consultations from the European Insurance and Occupational Pensions Authority (EIOPA) on the level 3 technical standards and guidelines.
Janine Hawes continued: “We hope negotiations begin quickly so this process does not drag on beyond the first quarter of 2012. The whole of the insurance industry needs to be in the same position regarding the regime’s development and there needs to be an end to the ‘behind closed doors’ phase where only key stakeholders are briefed on various pre-consultations.
“Firms will be especially keen to get a clear understanding of what the 2013 reporting requirements will entail. Both papers include the need for an implementation plan, but the details of what this will need to cover, and the date of reporting, differ. Firms need clarity on the requirements and sufficient time to build this into their overall plans. Council’s suggestion that EIOPA has until 31 March 2013 to issue guidelines on the contents of the implementation plans just doesn’t provide enough time for firms to be able to deliver by the proposed 1 June 2013 deadline.”
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