The Council of the European Union has proposed to delay the final Solvency II deadline until January 1, 2014.
Insurers across Europe are due to implement the Solvency II rules, which address insurers’ capital requirements and risk management practices, by January 1, 2013.
The proposal, contained in the Council’s Presidency Compromise on the Omnibus II directive, suggests Solvency II’s legal requirements will need to be transposed into national law by March 31, 2013.
However, UK insurers would not be governed by the new solvency rules until January 1, 2014.
PricewaterhouseCoopers global head of Solvency II Paul Clarke says: “The Council of the European Union’s recommendation that the full requirements of Solvency II should not be implemented until January 1, 2014 is an interesting step forward, but it is not the full story.
“The European Parliament still needs to put forward its recommendation ahead of negotiations between the two groups before the market can fully understand where the issues around the Level 1 text and implementation date will end.
“It is unlikely the issue will be fully resolved until later this year, so it is vital insurers press ahead with their current plans and timetable. Any distraction now could prove potentially costly in the long run.”
FSA chief executive Hector Sants yesterday hinted the Solvency II deadline could be relaxed.
Sants, who gave a speech at the Association of British Insurers’ biennial conference in London, said: “We expect firms to be ready. Until the Commission changes the deadline we continue to expect firms to be ready for the deadline even if it is obviously recognised that the Commission is giving consideration to whether that deadline is achievable.”