Delay for Solvency II start date

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23 July 2012

The introduction of the Solvency II capital requirements for insurers could be delayed until January 1, 2014.

Talks between the European Parliament, European Commission and the European Council have failed to reach agreement on the outstanding issues of the reforms.

As a result the full implementation date was last week pushed back by a year to 2014 due to the European Parliament being unable to vote on the final Solvency II wording.

The parliament resumes sitting in October after the traditional summer recess, although there is no guarantee a final wording will be available before then.

The European Commission believes adoption of the final wording will not be before October 31, creating uncertainty for member states and insurers.

All European member states have to pass the Solvency II requirements through their respective parliaments before the reforms can be implemented.

Association of British Insurers Director of Prudential Regulation Hugh Savill says the delay will mean insurers have less time to prepare for implementation of Solvency II.

“We are disappointed that, despite best efforts from all involved, there was no agreement in the Solvency II discussions,” he said.

“This delay was not caused or asked for by industry who are keen to see the outstanding issues resolved.”

Mr Savill says insurers will be “in limbo” until the European authorities can agree on a final text for the reforms.