Insurers should press on with SII plans – PwC

Insurers should stick to their Solvency II implementation plans despite the uncertainty around the directive’s timetable, according to accounting firm PwC.

The implementation date of Solvency II has been cast into doubt after both the European Council and the  Economic and Monetary Affairs Committee have proposed that companies should implement the new directive by January 2014 instead of 2013.

“Clearly the uncertainty around implementation date is not ideal, but the main foundations of the directive and their implications are well established and unlikely to change,” said PwC insurance partner Jim Bichard in a statement. “There is, therefore, no reason why insurers cannot press on with their plans while the timings and technical details are being finalised.”

According to Bichard, UK insurers are keen that the Financial Services Authority pushes ahead with its implementation programme, and particular the capital model approval process, given the investment companies have made in tools and people.

“Many insurers are concerned that an additional year will add unnecessary costs as companies will have to comply with, and produce data and information for, parallel regimes in 2013,” Bichard said.

He added: “While certain elements of a delay would be welcome, nobody wants a loss of momentum as insurers have been working towards Solvency II for many years and are eager to start embedding it into their businesses.”

Bichard contended that sticking to the original 2013 plan would give insurers more time to iron out any issues and be fully compliant by day one.

“If the timetable slips it will give companies little time to put any issues right before they have to be fully compliant,” he said. “The sooner insurers are able to transition from planning to implementation, the sooner companies will be able to run their businesses on a Solvency II basis and the more competitive and reputational advantages they will gain.”