Firms need time to bed in Solvency II changes: ABI

Firms need time to bed in Solvency II changes: ABI

The PRA must allow time for new requirements made under Solvency II to bed down for the benefit of insurers and the insurance industry, a senior adviser at the ABI has said.

Steven Findlay, policy adviser for prudential regulation at the ABI, commented on the fact that reporting and public disclosure measures required for Solvency II – due to come into force in 2016 – have only just been finalised.

He said: “The reporting and public disclosure measures are a significant step change, and the requirements have been finalised only recently. A sensible and pragmatic approach to implementation by the PRA will allow time for these requirements to bed down across the industry.

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“The ABI is continuing to work closely with the PRA and the European Insurance and Occupational Pensions Authority to ensure this transition is as smooth as possible.”

Insurers have submitted and are awaiting approvals for applications to the PRA for internal models and other measures, and these applications have had to incorporate several last-minute clarifications from the regulators.

At the end of August, a survey of insurers by pan-European insurance trade body Insurance Europe showed that many respondents were concerned over timelines for implementation and compliance.

According to the study, many respondents were concerned that the final version of the Quantitative Reporting Templates, which insurers need to comply with the third pillar of Solvency II, will only be adopted by the European Commission this month (September), just four months ahead of when the new regime comes into force.

Adviser view

Matthew Walne, managing director for Loughborough-based Santorini Financial Planning, said: “There has been a slow, steady death of the traditional life and pensions provider. For example, we had the RDR and the evolution of wrap platforms, and they will find it more difficult to write new business. We have seen a lot of consolidation in the insurance industry and we may see much more of this happening.”