Ratings agency says insurance industry will welcome proposed transitional arrangements
Revisions proposed in Omnibus II will mitigate market disruption caused by Solvency II, according to ratings agency Standard & Poor’s.
The agency also said insurers will welcome the transitional arrangements proposed, which allow the industry more time to adapt, particularly in terms of capital requirements.
But S&P conceded there may be some discontent among those insurers that have already invested heavily in resources to prepare themselves for full implementation in 2013.
In a statement, the agency said: “If EU legislators were to adopt the proposed revisions as drafted, these benefits would be partly deferred, but our ratings on European insurers would likely be more stable than without the revisions.”
S&P also reiterated its concerns about the likelihood of significant market consolidation as a result of Solvency II and the need for insurers to reexamine their business models, which could affect product design, matching asset classes, pricing, and distribution.
The agency expects the administrative burden of Solvency II to be reduced significantly if the Omnibus II revisions are adopted.
S&P also expressed concern that international competitiveness could be affected by Solvency II requirements.
Omnibus II confirmed the revised implementation date of January 1, 2013.
