European Commissioner, Michel Barnier, has put forward a draft EU Directive concerning the introduction of the capital adequacy regime for the insurance sector that would delay the planned Solvency II start date until 1 January 2016, a full two years after its launch date for next year was originally due.
The delay is designed to give insurers more time to comply with the Solvency II insurance capital adequacy regime and to hammer out remaining national differences across the EU and other contentious issues.
Commenting on the delay Paul Clarke, a partner and global insurance regulatory leader at the PwC consultancy, said: "The current Directive had a start date of January 2014, which became unrealistic given the slow progress on Omnibus 2. It was widely known that a 'Quick Fix 2' was required to move the date from 2014, and there was concern in the market that a safe date that avoids the need for a 'Quick Fix 3' would have been in the distant future.
"The fact that Commissioner Barnier has chosen January 2016 as the start date in this new Directive is encouraging and reflects confidence among the policy makers that a solution to the outstanding long term guarantee issue will be found this year ahead of [EU] Parliamentary elections in 2014.
"This Directive, together with the European Insurance and Occupational Pensions Authority's (EIOPA) guidelines to apply from 2014, will provide the market with greater confidence about final preparations for a full Solvency II implementation."