EC formally extends Solvency II deadline ‘one last time’ to 2016

The Insurance Insider
2 October 2013

The European Commission (EC) has published a formal blueprint for a 1 January 2016 coming-into-force date for the much-delayed Solvency II directive, after obtaining assurances that this would constitute a final delay in the process.

In a communiqué dated today (2 October), the EC confirmed that the parties to the previously intractable ongoing legislative negotiations had agreed that there should be no further changes to either the transposition or application dates of the directive.

Under EU law a transposition period gives member states time to adopt and publish the directives in time for a final implementation deadline known as the application date.
The original Solvency II implementation schedule envisaged a seamless overnight transition into the new regime with a 31 October 2012 transposition of the directive and a 1 November 2012 application date.

However, last year the dates were postponed to a now-expired 30 June 2013 date for transposition and to 1 January 2014 for its application.

The latest, and ostensibly final, proposal envisages a transposition date of 31 January 2015 and an implementation date of 1 January 2016.

The EC statement acknowledged that the most controversial issue in the difficult ongoing “trilogue” negotiations between the European Parliament, the Council and itself was the treatment of life-related insurance products with long-term guarantees, which particularly related to the volatility of asset prices or discount rates.

The impasse led to negotiations being suspended pending a technical assessment by EU insurance regulator the European Insurance and Occupational Pensions Authority (Eiopa).
In June Eiopa published its findings and proposals, which the EC welcomed as “constituting the parameters for a political agreement” on the directive’s “Omnibus II” enabling legislation, which is currently stalled in the EU lawmaking process.

The Commission reiterated that “it should be possible to find a compromise” within the scope of the measures that Eiopa had recommended.

In a written statement Commissioner Michel 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.”