An application to delay the directive was made by European Commissioner Michel Barnier, who has led the directive through the European courts, yesterday. The directive was originally scheduled for implementation on 1 January 2014.
Barnier said: “I have always wanted rapid implementation of Solvency II. But the currently planned date is simply no longer tenable.
“We have therefore proposed this postponement in order to avoid any legal uncertainty, especially for undertakings and supervisory authorities; we have done this only after obtaining assurance from the Council and the Parliament that they would not further change this new application date of Solvency II.”
Part of the reason for the delay, said Barnier, was that a legislative proposal known as “Omnibus II” – which is currently in trilogue discussions – will make “significant modifications to Solvency II, in particular as regards insurance products with long term guarantees”.
The Commissioner added that, based on a report from the European Insurance and Occupational Pensions Authority, a package of measures is under discussion to facilitate the transition to Solvency II and “to mitigate the effects on the undertakings’ own funds of artificial volatility of asset prices or discount rates”.
As reported, EIOPA’s report, which Barnier yesterday described as "excellent", raised concerns about plans for the industry to cut capital charges on insurance companies’ infrastructure and private equity investments – which EU politicians thought would be a way of boosting growth and employment in the bloc – among other things.
Due to the concerns rasied and, despite Omnibus II progressing well, Barnier said it will not be possible to publish the Omnibus II Directive in the Official Journal before 1 January 2014 – when Solvency II is currently scheduled to start to apply.
A spokesperson from the Association of British Insurers said: "A lot of work remains to be done between now and January 2016; policymakers and regulators must now fully focus their efforts on providing insurers with a final set of rules that can be used in their implementation plans.
"The insurance industry has already spent a huge amount of money on Solvency II and a tight implementation deadline of January 2016 must be carefully managed if a further increase in costs – and subsequent impact on customers – is to be avoided."
