Omnibus II vote pushed back to November

The implementation of Solvency II could be delayed after the European Parliament’s vote on the crucial proposed Omnibus II amendments was pushed back again today - this time to 20 November.

The vote had been scheduled for mid-October previously.

KPMG’s insurance director Janine Hawes said that while delay was not a big surprise given the trilogue of European Commission, European parliament and the Council of the European Union failed to reach agreement before the summer recess, but the main concern is the knock-on effect this could have on the Solvency II implementation date. 

“There is still a long journey ahead to finalise the rules once Omnibus 2 is approved, as the level two and three requirements will need to be consistent with the amendments made,” she said.

“Official comments suggest that the regulators are still aiming for a Solvency II implementation date of 1 January 2014. However, it is becoming increasingly unrealistic to expect all insurers to be able to achieve this, especially as the final requirements for the determination of insurance liabilities remains unclear. 

“Companies need the certainty of having final rules in order to properly prepare for the new requirements. At the moment, there simply isn’t enough time for everyone to do this properly.

Last month the three-way meeting between the European Commission, European parliament and the Council of the European Union failed to reach an agreement on a key text, potentially delaying the implementation deadline for Solvency II beyond its current date of 1 January 2014.

The lack of clarity on Solvency II means there could be delays in presenting it for a vote before the European parliament. This in turn would give national insurance regulators and the insurance industry less time to comply with the directive ahead of the deadline.

PwC global Solvency II leader Paul Clarke said: “To some degree it is almost a procedural inevitability of having failed to reach an agreement during the trilogue process at the beginning of July, so to vote in October would have essentially meant they would have needed to have an agreement in place in the next week or two and clearly that is not where they are going to be, so to delay until November just follows as a consequence of that.

“The bigger question is where does that leave the overall programme and is 1 January 2014 still viable as a start date?

“As I have said all along, it looks really tight and another delay here is not helpful. If each alignment in the procedure that has to follow works perfectly and falls into place at its earliest opportunity they could probably still get it in by the end date but it is under a lot of pressure. Added to that, nothing about the process so far has fallen into place that well so it is hanging in the balance.”