09 August 2011
Parliament calls for delay but European Insurance and Occupational Pensions Authority says it would like aspects of implementation to start now
The European Parliament has called for a delay in the implementation of Solvency II, prompting speculation that an official announcement is imminent from the European Insurance and Occupational Pensions Authority (Eiopa).
"I would imagine that following the European Parliament's action in calling for a delay, there will be some official comment from Eiopa soon," says London-based Mike MacDonagh, enterprise risk management content strategist at Wolters Kluwer Financial Services. "For the past month or so a delay has felt like a done deal but until Eiopa makes it formal the uncertainty will remain. Perhaps this is why the European Parliament made its comments."
However, a spokesperson from Eiopa makes it clear it will not be making an announcement. "It's not our decision, therefore we aren't making an announcement," she says. "We are an observer in this process like everybody else."
On the question of timing of Solvency II, Eiopa does not have a definitive answer. "Timing has been an ongoing discussion," says the spokesperson. "The discussion has been whether 2013 should be the date of implementation or not, but Eiopa has always said we want to start the process of Solvency II now. Again, the decision of the legal effective date is beyond us."
She continues: "What we want to do is start the implementation of Solvency II, even if it's not legally binding. For example, what we could do is start working on the approval of internal models, because all these issues take time. We could work with insurance companies who could present the internal models they're working on to the supervisory authorities and then we could start the approvals respectively. So there are areas where implementation could start. But this all is a decision of the Parliament and the Council with respect to the timing."
However, MacDonagh says issues like this might be behind the suggested delay. "The pressure for a delay seems to be coming from some of the regulators themselves," he says. "This could be caused, for example, by concerns about their ability to examine and approve internal models."
Not everyone agrees pressure is coming from regulators. "It wouldn't surprise me if pressures are being brought to bear on the regulators by the industry to offer some sort of clemency," says London-based John Mason, chief operating officer at financial data management consultancy Netik. "When you look at the complexities of what firms have got to achieve, it's a pretty in-depth process that people need to go through."
Solvency II implementation is set for January 1, 2013.