Ongoing uncertainty regarding the deadline and implementation of Solvency II are creating regulatory fatigue among European re/insurers, says KPMG in a new report.
The European parliament has again delayed discussions on Omnibus 2, moving them back from a planned June date to October of this year, with no official timetable in place for the remaining process. Delays are challenging the credibility of the European regulatory regime.
Commenting on the delay, Peter Ott European head of Solvency II at KPMG, said “it is disappointing that the opportunity has not been taken to provide a clear timetable for the remaining process to make Solvency II a reality. European insurers are ostensibly fatigued by the many delays...and the discussions over whether the directive will ever become a reality in its current form are becoming more intense. A clear timetable is needed on the remaining steps to industry compliance.”
The delays will mean that it will impossible to transpose Solvency II guidelines into national legislation by 30 June 2013, as was planned. Instead interim measures will need to be put in place, said Janine Hawes, insurance director at KPMG, adding that the accounting firm is working on the assumption that full compliance will not occur until 1 January 2016.
“What will now be critical for insurers are EIOPA’s proposals for the interim period,” said Hawes. “In December, EIOPA published its opinion regarding procedures that supervisors should put in place from 1 January 2014 and is due to follow this with guidance in the spring of this year. The focus is heavily on the pillar 2 requirements of Solvency II such as governance, risk management and ORSA principles, so insurers should continue to further develop and stabilize these areas throughout this year. ”
KPMG, Solvency II, EIOPA, regulation, delay