On 5 June 2015, the European Commission adopted its first third country equivalence decisions under Solvency II, granting Switzerland, Australia, Bermuda, Brazil, Canada, Mexico and the USA full or partial equivalence. These were done by way of two separate delegated acts: one for the full equivalence decision in relation to Switzerland and one for the provisional equivalence decision in relation to Australia, Bermuda, Brazil, Canada, Mexico and the USA. Like most commentators, we expected (http://www.hfw.com/Insurance-Bulletin-18-June-2015) these decisions to be scrutinised and confirmed by the European Parliament quickly. However, in a surprise turn of events, the European Parliament on 20 July 2015 published correspondence (https://polcms.secure.europarl.europa.eu/cmsdata/upload/b0f9a0c6-a751-47ef-8880-0c6e9b6b7235/D34841%20-%20Hill%20Solvency%20II%20-%20extending%20the%20deadline%20for%20objection%20to%20a%20DA.pdf) from Roberto Gualtieri, Chair of its Committee on Economic and Monetary Affairs (ECON), to Jonathan Hill, European Commissioner for Financial Stability, Financial Services and Capital Markets Union, which included a letter that on 16 July 2015 extended the time for scrutiny of the provisional equivalence decision by an additional three months, i.e. until 7 December 2015.
The European Parliament’s letter to the European Commission does not give any reason for its decision to extend the scrutiny period. However, other correspondence also published on 20 July 2015 indicates that the European Parliament had previously requested (https://polcms.secure.europarl.europa.eu/cmsdata/upload/647b2ca0-558b-4309-afaa-435c0c280136/Solvency%20II%20DA%20-%20Letter%20to%20COM%20-%2001.04.2015.pdf) that the equivalence decisions be presented “in a separate manner, per third country and per area”. If this had been done, the European Parliament would have been able to decide whether to object to each country and each area. As it is, they are only able to object to the decision as a whole. It is unclear whether in April 2015 the European Parliament was already considering that it would need to object to the decision on the basis of certain third countries or certain equivalence areas. In any event, the European Parliament has decided that it needs more time to consider whether to object to the decision and we will need to wait and see what happens.