FTA In Depth: Solvency II uncertainty will continue
Although it is "highly unlikely" that Solvency II could be further delayed, industry commentators have not ruled it out.
The current implementation timetable for Solvency II continues to hang in the air, with the European Parliament and the Council of the European Union not agreeing on the deadlines but proposing that implementation will happen by 1 January 2014.
Solvency II has been in the making for the last decade and has now been delayed several times, with the current proposal for full implementation - which is not set in stone - the latest revised deadline having been been pushed back a further year following a proposal in June 2011 by the European Council.
Jim Bichard, insurance regulatory partner at PricewaterhouseCoopers, claimed there were a number of reasons for the delay.
He said: "They are attempting to do something that has not been done before, which is to harmonise everything across the EU and with that there's a huge amount of political negotiation involved as the different states' insurance markets are at very different stages and the supervisors' sophistication is very different.
"There are lots of changes, as well as trying to harmonise the whole of Europe and all different stakeholders in the same place. So if you look at that, 10 years is not bad going."
According to Mr Bichard, the legislative process behind the new rules, Omnibus II, is the critical factor. This gives the European Insurance and Occupational Pensions Authority (Eiopa) legal powers to amend Solvency II, sets the implementation date, introduces transitional measures, specifies the areas and the timing for further legislation and aligns the directive to the Lisbon Treaty.
Omnibus II is currently waiting to be approved by the Council of the European Union and the European Parliament and should be finalised in early 2012.
Lack of clarity
Mr Bichard said that there remains a "lack of clarity" on when the systems will go live, but that it "looks likely" that there will either be a lot of transition in 2013 or a full-scale one year delay to 2014.
The European Parliament and Council have still not agreed on the implementation timetable. Parliament's current proposal is for the transposition of the directive into national law to take place on 31 December 2012, with the power for granting of supervisory approvals set for 1 January 2013 and the pre-implentation reporting deadline introduced on 1 July 2013.
The Council's proposed timetable has set transposition stage deadline at 31 March 2013, with the power for granting of supervisory approvals and pre-implementation reporting by 1 June 2013.
Even the level of pre-implentation reporting differs between the two.
The European Parliament wants insurers to supply a full Solvency II balance sheet, its own funds, its minimum capital requirement (MCR), its solvency capital requirement (SCR) and a regulatory supervisory report (RSR). Member states may waive the RSR requirement for insurers without the necessary systems and structures in place.