If you're responsible for Solvency II implementation at a long-term insurer, you probably have your head in your hands (again) today (28 January 2013). There could be any number of reasons, but I bet your list includes:

  • Trying to keep senior management engaged, when you're suffering terrible implementation fatigue, you've already spent more time and money on Solvency II than you'd care to admit...and there's still no end in sight;
  • (If you're really lucky) you've been carefully selected to participate in EIOPA's Long-Term Guarantee Assessment, which starts today (they've given you what you need, right? *);
  • You and your colleagues are already working all hours trying to prepare your FSA returns, without having to worry about EIOPA as well;
  • You've just heard the German Life Insurance industry really is trying to push Solvency II back until at least 2017, if it can't get rid of it altogether (it's all those policy guarantees);
  • Although you've been telling everyone for ever that Solvency II will force insurers to reduce their holdings in bank equities and bank debt, they wouldn't listen. But when Tidjane Thiam, Chief Executive of UK Insurer Prudential made the same point in Davos last week, policy makers suddenly sat up. (EIOPA officials are privately admitting that Mr Thiam's right...and that Pillar 1 will have to be re-written.)

If you're responsible for Solvency II implementation at a general insurer, you may not quite believe your luck. After all, most of the outstanding technical issues (and the costs and risks that go with them) are on the life insurance side, so your work is almost done. Omnibus II could have been amended to allow Solvency II for general insurers to proceed on time. But it wasn't. Why not?

One possible answer lies with the conspiracy theorists. If Tidjane Thiam is right (and I think he is - don't you?) the last thing policy makers need right now is a new set of regulations that encourage the biggest holders of bank equity and bank debt (insurers) to reduce their investments...at the same time as Basel requires the banks to hold more capital, and the politicians somehow expect them to keep on lending. That doesn't mean there isn't anything in the Long-Term Guarantee Issues - there undoubtedly is; but what it does mean is that there's rather more to these issues than previously met the eye. Just a little more transparency, please; and I'm sure we'll all feel better.