The market is convinced that Solvency II will be delayed again.
Rumours began to circulate three weeks ago. Until now, the Commission has insisted that Omnibus II will be in force before 1 November 2012. And that when Omnibus II comes into force, it will amend Solvency II to require the EU Member States to transpose the Solvency II Directive into their national laws by 1 January 2013. (Re)insurers would then be required to comply with some of Solvency II from 30 June 2013, and all of it from 1 January 2014.
That made sense. Omnibus II had to be in force before 1 November 2012. If it wasn't, the unamended Solvency II Directive would come into force on 1 November 2012 as planned, and Solvency I would be revoked. And these things would happen before the European Union completed the Solvency II regime and before the Member States had transposed it into national law.
And the rumour? That Omnibus II would delay the Member State transposition date from 1 January 2013 to 30 June 2013.
We deliberately refrained from repeating this rumour until the Commission confirmed, or denied, the position. It has now done so...and it's worse than you might have thought.
First up: the Commission no longer expects Omnibus II to be in force before 1 November 2012. For that reason, it is expecting a new Proposal for a Directive of the European Parliament and of the Council. That proposal (if adopted) will amend the Solvency II Directive to stop it coming into force on 1 November after all.
Next up: like the market, the Commission also expects the Member State transposition date to be delayed from 1 January to 30 June 2013; but it's not yet clear when or how that will be achieved. Omnibus II may not be in force in time to secure it.
It is also unclear whether the 6 month extension about to be afforded to Member States will also be offered to (re)insurers and, if it is, whether it will apply to one or both of the (re)insurer compliance dates currently on the table (30 June 2013 and 1 January 2014). The Commission and some Member States have previously said that (re)insurers will have to comply with Solvency II from 1 January 2014 - even if the final rules are not available until 30 June 2013. Because research shows that most (re)insurers will need the final rules for at least 12 months before they can reasonably be expected to comply with them, and Europe's track record for meeting self-imposed deadlines is so poor, we hope (re)insurers will also have an extra 6 months to comply, if they need it. Only time will tell.