The Polish Presidency of the Council of the European Union published its latest compromise proposal relating to the proposed Omnibus II Directive, which, if passed, will amend Solvency II, on 21 September 2011.
Amongst a number of proposed amendments, there is a change to the eligibility criteria for the transitional measures which are due to apply to insurance and reinsurance undertakings in run-off. The transitional measures provide that, where an insurance or reinsurance undertaking is in run-off by the date Solvency II enters into force, that undertaking shall not be subject to the requirements of Solvency II for three years where it has satisfied the supervisory authority that it will terminate its activity by the end of that three year period. This exemption will only apply where the undertaking has no group companies conducting new insurance or reinsurance contracts and where the undertaking provides its supervisory authority with an annual report setting out its progress with regard to terminating its activity. The additional criterion under the latest proposal is that the undertaking must have notified its supervisory authority that it is applying the transitional measures.
It is also worth noting a further amendment to these provisions, which provides that an insurance or reinsurance undertaking in run-off may choose to operate in accordance with the provisions of Solvency II even where the conditions for the exemption are met.
Now that this latest proposal has been published, the next step for Omnibus II is to go before the European Parliament and the indicative date for the plenary sitting has recently been revised to 13 December 2011.