Speculation about a delay to the Solvency II timeline led up to the September 18, 2012 meeting of the Omnibus II Trilogue (comprised of the European Commission, European Council, and the rapporteurs/shadow rapporteurs from the European Parliament).
Our understanding is that a deferral of the implementation date to January 1, 2015 was indeed proposed by the European Commission at the Trilogue meeting, but that there was no consensus on this point.
"A delay to Solvency II is in no way guaranteed. The amending directive that moved the implementation date to January 1, 2014 and national transposition to June 30, 2013 is now binding. It will require agreement of Council and a full plenary vote of the Parliament to change the timing,” says Martin Bradley, EY’s Global Solvency II Lead.
The proposal to delay is closely linked to the Commission's preference to wait until February or possibly March 2013 for the results of EIOPA's impact assessment on the treatment of long-term guarantees (LTG) before concluding negotiations.
Unfortunately there was also no agreement reached on the Terms of Reference (ToR) for EIOPA's work, due to different views on the matching adjustment methodology. As a result, it appears that publication of the EIOPA ToR will be delayed, with similar implications for EIOPA's LTG technical specifications.
This will increase pressure on the industry as the demand for results of the impact assessment are likely to result in the delivery remaining unchanged.
“Insurers are already a long way through adopting Solvency II, and our sense is that they should maintain their focus despite the potential for a delay. However, the issue of long-term guarantees still hangs over the industry,” says Bradley.
“Insurers are currently facing a difficult balancing act, getting as much as they can done to adopt Solvency II while waiting for clarity on the matching adjustment method."