EIOPA has published its final guidelines for the preparation of Solvency II. These are based on the consultation papers issued earlier this year, which received approximately 4,000 submissions. The guidelines deal with:
- Systems of governance
- Forward looking assessments of own risks
- Submissions of information to national regulators and
- Pre-applications for internal models
The guidelines are addressed to national regulators, who will determine how the guidelines are incorporated into their national frameworks. They will have 2 months, from publication of the guidelines in all official languages (expected by 31 October), to “comply or explain”.
The Central Bank of Ireland (the “Central Bank”) will publish its corresponding guidelines shortly and will hold an industry briefing on 25 November. We understand that this briefing will focus on the Central Bank’s process for implementing EIOPA’s guidelines and will set out the Central Bank’s supervisory approach. The Central Bank has already indicated that it intends to comply with the guidelines.
The guidelines will apply from 1 January 2014. There will, however, be a phasing in of some provisions over the course of 2014-2015 and an increase in regulators’ expectations towards (re)insurers over the period. The publication of the guidelines should refocus (re)insurers on their Solvency II preparations.
Generally, the changes between the final guidelines and the earlier consultation papers are minimal; they are mostly clarifications. There are, however, some useful notable adjustments, including the extension (by two weeks) of the annual reporting deadlines to:
- 22 post-year-end for solo companies and
- 26 weeks post-year-end for groups
Earlier this month, the European Commission published a proposal for the so-called ‘Quick Fix II Directive’ postponing the Solvency II implementation date until 1 January 2016.
For other recent developments connected with Solvency II, please see our in-short article.
Contributed by Gillian Young
