Insurers could be forced to fork out on more costs if the European Commission delays the introduction of Solvency II by up to 12 months, law firm Evershes has warned.
Solvency II was due to be implemented in January 2013 but concerns over the preparedness of some countries and regulators, as well as parts of the industry, mean that they are unlikely to be introduced until 2014, according to reports today.
Michael Wainwright, partner at international law firm Eversheds, said: “Solvency II has been the Financial Services Authority’s largest ever project. It has been a massive cost for the UK insurers, who have had to pay a special levy to the FSA on top of their own costs of implementation.
"Despite this investment, the FSA has struggled to resource the project. So it is small wonder that other European regulators have underestimated the challenge and are now pleading that they need more time. A possible outcome is that the UK will implement in 2013 and other regulators will implement in 2014.
"This is not an ideal result for UK insurers, but it may be better than incurring an extra year of transitional project cost. On the other hand, it means that the UK will bear the cost and risk of piloting the new regime to the benefit of the rest of Europe.”
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