Earlier today, it was announced that yesterday’s trilogue discussions on the Omnibus II Directive (Omnibus II) had finished in agreement. The announcement puts to rest recent uncertainty about the future of the Solvency II Directive and sets in train a timetable bringing the new regime into force from the beginning of 2016.
Of more immediate concern, a consultation paper issued by the PRA (CP9/13) in October describes its approach to guidelines published by the European Insurance and Occupational Pensions Authority (EIOPA) that address Member State preparations for Solvency II (theGuidelines).
Issues for firms
- Detailed requirements of the Solvency II regime are only likely to be finalised some time in 2015. This is very late given the 1 January 2016 start date proposed by the second “Quick Fix” Directive that is currently making its way through the EU legislative process.
- Because the Guidelines are addressed to Member State regulatory authorities, they are not binding on firms.
- The PRA does not propose to make new rules reflecting the requirements of the Guidelines. Nonetheless, it expects firms to comply with them to the extent specified in a Supervisory Statement (i.e. in guidance).
- The PRA argues that it has not sought to set substantially new expectations of firms and, in any case, that the Guidelines in many respects reflect work that firms should be doing to prepare for Solvency II. Where PRA expectations do extend beyond current requirements, we question its use of guidance instead of rules.
Firms only have until tomorrow, 15 November, to comment on the PRA’s proposals in CP9/13.
Our more detailed briefing can be found here.