In January 2013, we reported that EIOPA had published its opinion on interim measures regarding Solvency II (the ‘Opinion’). On 27 March 2013, EIOPA launched a public consultation on draft guidelines for the preparation of Solvency II (the ‘Guidelines’), noting that it is in the best interests of policyholders, insurers and supervisors to build on the steps already taken to prepare for Solvency II. The public consultation period will end on 19 June 2013. Once finalised, the Guidelines will be addressed to each Member State’s national competent authority (“NCA”) responsible for (re)insurance supervision. The consultation papers cover the following key areas identified in the EIOPA Opinion:
- System of governance (including risk management system);
- Forward looking assessment of a (re)insurer’s own risks (based on ORSA);
- Pre-application of internal models; and
- Reporting to supervisors.
While the focus is on Pillars II and III of Solvency II, it is worth noting that many of the interim measures are closely linked to Solvency II’s Pillar I requirements.
EIOPA advised that NCAs will have two months following the issuance of the Guidelines to confirm whether they comply or intend to comply with them (operating on a “comply or explain” basis).
EIOPA intends to publish the Guidelines in autumn 2013. Each NCA will then be expected to implement the Guidelines in their jurisdiction by 1 January 2014. The intention is that the Guidelines will apply only for the duration of the preparatory phase of Solvency II.
It should also be noted that the European Parliament rescheduled its plenary session on Omnibus II from 10 June 2013 to 22 October 2013. Given the close link between Omnibus II and Solvency II, It is hoped that this plenary session will provide clarity on when Solvency II will be fully implemented.