The application date of Solvency II is to be pushed back to January 1, 2016, Michel Barnier, the EU commissioner responsible for financial services, has announced, stating the planned date is no longer tenable. But he said this should be the last delay.
He said in a statement that the legislative proposal known as Omnibus II, which will make significant modifications to Solvency II, in particular as regards insurance products with long-term guarantees, will not be ready to be published before January 1, 2014, the date Solvency II is currently scheduled to start to apply.
Omnibus II, currently in trilogue discussions, is being modified following a report by the European Insurance and Occupational Pensions Authority (EIOPA). Changes could include a package of measures to facilitate the transition to Solvency II and to mitigate the effects on the undertakings' own funds of artificial volatility of asset prices or discount rates.
“The latest trilogues on Omnibus II are progressing well,” Barnier said in the statement. “An agreement between Council and European Parliament is within reach. But it will not be possible to publish the Omnibus II Directive in the Official Journal before 1 January 2014, the date when Solvency II is currently scheduled to start to apply. Moreover, before Omnibus II can be applied, a number of implementing measures are needed, and these cannot be finalised before the details of Omnibus II are known.
“I have always wanted rapid implementation of Solvency II. But the currently planned date is simply no longer tenable. We have therefore proposed this postponement in order to avoid any legal uncertainty, especially for undertakings and supervisory authorities; we have done this only after obtaining assurance from the Council and the Parliament that they would not further change this new application date of Solvency II.”
Barnier invited the co-legislators to reach agreement as soon as possible on Omnibus II and on this new Directive.