Eiopa voices concerns over Solvency II timetable

The chairman of the European Insurance and Occupational Pensions Authority (Eiopa) Gabriel Bernardino has written a letter to the EU financial services commissioner Michel Barnier, expressing his concerns about the lack of a clear and credible timetable for the implementation of Solvency II.

Bernardino said his concerns over the effect the stagnant Omnibus II negotiations were having on the process were shared by the heads of the relevant European authorities on the Board of Supervisors.

Omnibus II is a package of changes to the Solvency II Directive. Solvency II is due to be implemented on 1 January 2014.

“While we agree with the necessity to build a sound and prudent regime for long-term guarantees under Solvency II and welcome the role that the EU political institutions are willing to attribute to Eiopa in the impact assessment, we are also seriously concerned about the lack of a clear and credible timetable for the implementation of the new regime,” he wrote.

Bernardino said the EU was faced with “an outdated and fragmented regulatory and supervisory system” in the insurance sector and if it continued with the current Solvency I regime, supervisors may be unable correctly to identify and analyse risks and take the necessary action. He said this would have a serious impact on the protection of policyholders.

Without a robust supervisory system at European level, he said, supervisors would be forced to develop national solutions in order to ensure sound oversight, each of which would conflict with the other.

“The uncertainties on Solvency II also have wider consequences,” he wrote. “The lack of certainty about the implementation is undermining EU credibility in international discussions as Solvency II is meant as a reference framework for risk insurance based supervision as the international level.”

Also included in the letter were Burkhard Balz, the German lawyer responsible for taking Solvency II through the European parliament, the European parliament and the Cypriot finance minister and Economic and Financial Affairs Council Council president Vassos Shiarly.