Lloyd’s has published guidance notes on Solvency II in order to provide managing agents with as much clarity and certainty as possible in order to assist in planning. Although Solvency II is still scheduled to enter into force on 1 January 2014, Lloyd’s plans are based on an assumption of a 1 January 2016 implementation date – the guidance notes make clear that this assumption is subject to change as further clarification emerges from the EU.
The guidance notes provide information on Lloyd’s approach to completing its Solvency II review work, an overview of Lloyd’s 2013 Solvency II timetable, and the impact of the Solvency II delay.
Two areas that Lloyd’s is said to be monitoring are: (i) the proposal by the European Insurance and Occupational Pensions Authority to introduce Solvency II interim measures from 1 January 2014; and (ii) the FSA’s proposed ICAS+ approach (i.e. using Solvency II work to meet ICAS requirements) for capital requirements.
Neither of these is expected to have a significant impact on Lloyd’s or its agents. Regarding interim Solvency II measures, Lloyd’s considers that the progress that has already been made towards implementing Solvency II and the plans that have been made for transitioning to Solvency II as business as usual should prevent any significant impact. Regarding ICAS+, Lloyd’s considers that this is largely consistent with the approach that Lloyd’s has already introduced for setting capital from 2013 onwards; Lloyd’s agents successfully used Solvency II internal models to meet ICAS requirements during 2012 and to set capital for the 2013 year of account, and Lloyd’s intends to continue to use this approach.