KPMG calls for clear roadmap on Solvency II after latest delay

Accountancy firm KPMG has called for a clear roadmap for the implementation of Solvency II regulations after the European Parliament plenary meeting to consider the Omnibus 2 amendments to the Solvency II directive was moved back from 10 June to 22 October this year.

No explanation for the delay was provided. But KPMG said it would allow the results of the current Solvency II impact study on products with long-term guarantees to be considered, and could lead to amendments to the legislation currently being drafted. 

The study, launched last month, with the European Insurance and Occupational Pensions Authority (EIOPA), is scheduled to provide its findings by 14 June with the European Commission expected to draft its own report for co-legislators by 12 July 2013. 

KPMG European head of Solvency II Peter Ott said while the delay in the plenary meeting had been expected, it was disappointing that the opportunity to provide a clear timetable for the remaining process to make Solvency II a reality had not been taken.  

“European insurers are ostensibly fatigued by the many delays that have happened throughout the past decade and the discussions 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,” he added.

KPMG insurance director Janine Hawes said: “Yesterday’s rescheduled plenary vote means that a second ‘quick fix’ directive will need to be put in place quickly, as the transposition of Solvency II into national legislation by 30 June 2013 is clearly impossible. 

“This will amend both transposition and implementation dates and will therefore end the speculation around the actual implementation date. Given the process that will be required to put the level 2 and 3 requirements in place once Omnibus 2 is finally enacted, we are working on the assumption that industry compliance will be moved to 1 January 2016,” he added.

“What will now be critical for insurers are EIOPA’s proposals for the interim period. 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 (Own Risk and Solvency Assessment) principles, so insurers should continue to further develop and stabilise these areas throughout this year. ”