The European Insurance and Occupational Pensions Authority, the European Union’s insurance watchdog, today will begin deliberations on interim guidelines for national regulators to be put into place from next year.
EIOPA is developing the guidelines to support local supervisors in getting insurers ready for new pan-European solvency rules, called Solvency II.
The framework, containing “key aspects” of the new rules including risk management and a preapplication of so-called internal models, or insurers’ own risk models to be approved by supervisors, need to be applied from Jan. 1 next year, EIOPA said today in an e-mailed statement. Still, it will allow for “some flexibility” because of the need to phase in provisions, it said.
“These guidelines are an important step toward consistent and effective supervisory practices in the preparation for the Solvency II implementation,” Gabriel Bernardino, chairman of the Frankfurt-based organization, said in the statement. “They will play an important role in supporting the good function of the internal market in the insurance sector.”
Solvency II, intended to make insurers in the region allocate the same capital reserves against the risks they take, has been in the making since 2001. No implementation date has been found so far, as lobbying by German, British and French insurers over the rules’ impact on long-term savings products has delayed its introduction.
“I still believe that it is possible, if everything goes right, to have the date of implementation of Jan. 1, 2016,” Bernardino told journalists on a conference call from Frankfurt today. He added that EIOPA still hasn’t received a timetable from the European Union.
The public consultation period will end on June 19 and EIOPA plans to publish the final guidelines later this year. This should allow local regulators “to put in place certain important aspects of the preparation for Solvency II starting on January 1, 2014,” the organization said.