An update from CEIOPS, Frankfurt
Following feedback received at the Committee of European Insurance and Occupational Pensions Supervisors, that Solvency II “had become too complicated”, there are reported plans in place to simplify the Solvency II framework.
Jonathan Faull, the European Commission's director general, internal market and services, spoke of the committee’s responsiveness to the comments, “we have listened... and will look at ways in which we can simplify the system without jeopardizing the economic risk-based approach, which is at the heart of Solvency II."
The Commission will shortly be publishing its proposal for the second Omnibus directive Omnibus II, which will address the time scale and implementation of Solvency II. This will include:
- Delaying the start date of Solvency II from 1 November 2012 to 1 January 2013 to accommodate firms’ year end.
- Introducing a legal "hook" for a number of transitional measures to facilitate a smooth transition to Solvency II.
- Aligning the Solvency II directive with the legislative procedure introduced by the Lisbon Treaty.
Faull also reiterated his belief in the directive’s ability to address insurers risk management shortcomings, despite concerns that had been expressed about the approach. He asserted that “the financial crisis shows what can be prevented with good risk management and sound governance," and "Solvency II is an economic risk-based approach that rewards good risk management and enhances policy holder protection."
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