Solvency II news: Deadline Delay Fever Special

The possible delay in implementation of Solvency II made the headlines on Monday. The FT reported that “one person familiar with the commission’s thinking confirmed that some delay was now likely.” News of a possible delay to full implementation was mentioned by Risk.Net earlier last week. “Deadline delay fever” may also be fuelled by two other factors. First, a speech by Commissioner Michel Barnier, at the CEA conference in Athens, in which he told delegates, “We will introduce measures to ensure a smooth transition to the new system where it is needed, but I do not want to delay the entry into force of Solvency II, namely 1 January 2013.” And second, the publication on 7 June of the third Presidency compromise text for the Omnibus II Directive that detailed some transitional measures. Analysis of the text by Milliman states, “While the latest text does not make any further adjustments to the time frame of Solvency II, additional text is included describing the arrangements that may be adopted during transitional periods in moving from current regimes. It is perhaps surprising, given the tone of the recent QIS5 report, that such extended transitional arrangements are considered necessary” (emphasis added). In response to the news, a spokesperson for the European Commission told Solvency II Wire, “The implementation date remains 1 January 2013. The Council is currently negotiating the Omnibus II proposal, and the issue of the date of application is being discussed, but no common position has been reached yet. The commission recognises that some parties will need more time to implement certain measures, and appropriate measures will be introduced to ease implementation.” A draft report on Omnibus II is expected in late July. On Monday morning at the start of a Q&A session of the PRA Insurance Conference both Hector Sants, Chief Executive Officer, FSA and Julian Adams, Director, Insurance Division, FSA, confirmed that the FSA timetable has not changed and it is working towards a January 1 2013 implementation deadline. As rumours circulate and speculation continues there is a danger that firms will ease their grip on preparation. If there is a delay it will give the industry much needed breathing space but if the deadline stands valuable time will have been lost.

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