Source: Marek Nowak¸ PKF Malta¸ July 2012.
The EU insurance legislation aims to unify the EU insurance market. The standardization of regulations was highly needed to oppose hampering the goal of a single market¸ as for many member states the EU minima were not enough¸ and they took up their own reforms to enhance consumer protection.
Omnibus II is a directive amending the 2009 Solvency II Directive. Translating from the German Omnibus meaning bus. And like a bus¸ which is picking up passengers along the way¸ the directive is trying to pick up the best solutions from EU member countries. But this journey – the legislative process of the Omnibus II Directive – is filled with caveat¸ making it very difficult to reach a common agreement. It is most certain that the implementation of these changes has to be done as an overall package.
Implementing the Omnibus II will result in replacing CEIOPS with EIOPA and fulfilling obligations of the Lisbon Treaty. The following may be affected by Omnibus II: standards and extent of quarterly reporting¸ Own Funds¸ SCR (specific risk modules)¸ Life Technical Provisions¸ Activity by country¸ Templates applicable to ring-fenced funds etc.
Currently Omnibus II is under a three way discussion between European Parliament¸ the Council of Ministers and the European Commission. Originally it was planned that the agreement should be reached by the end of June with an aim to be forwarded to the European Economic Affairs Committee for a vote in September of current year. But anticipating a further delay in finalizing the final agreement of the Omnibus II will effect the deadline for transposition of Directive 2009/138/EC on October 31¸ 2012. Therefore the European Commission decided to postponed the final term of agreement¸ and modify the original Solvency II transposition date to June 30¸ 2013 and implementation date to January 1¸ 2014.
The Czech Republic and Swedish governments have raised concerns that the delay in finalizing the Omnibus II will leave national authorities and insurances with insufficient time to implement the system. In consequence¸ they are pushing that possibility of having the deadline for implementation of Solvency II postponed to January 1¸ 2015. EIOPA responded in a press release stating “Despite possible changes EIOPA strongly believes that the industry should use this package already now in order to start the implementation phase.” Furthermore Gabriel Bernardino¸ Chairman¸ EIOPA¸ said “The publication of this report is crucial because insurance undertakings and supervisors need to start as early as possible with the implementation of reporting and disclosure requirements.” This brings a clear message: insurance companies should start now.
Summarising Solvency II is the largest ever change to European insurance solvency regulations. But the directive which is needed to unify the insurance market and guarante