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Barnier backs 2014 Solvency II delay

Thursday 17 November 2011 - by Andrew Hickley

Michel Barnier - photo by European Commission

Europe's internal market commissioner Michel Barnier has given his first public blessing for the landmark Solvency II directive to be implemented in full from 2014.

The European Commission supports a "smooth transition" of the standard, pinpointing 1 January 2014 as the date that the accord should apply to insurers, he said in a keynote speech at an event hosted by the European Insurance and Occupational Pensions Authority.

"The details of this transition are still to be finalised, but it is clear that it [pushing back the date] is a plus point enabling insurers, national supervisors and Eiopa to prepare better for the new regime's entry into force," he told delegates in Frankfurt on Wednesday.

In June, Barnier said that he did not want to push back the planned 1 January 2013 entry into force of Solvency II, though he appears to have now backed down on this. At the time, he urged insurers to devote themselves to preparing to implement the new regime in time for the original 2013 deadline.

Barnier's acknowledgement of the delay follows similar calls in a draft report from the European Parliament and the Council of the European Union to push back the implementation date of the directive to 2014.

However, Barnier did state that the directive would need to be transposed into national law by the beginning of 2013, before being required in full from 2014.

In October, the UK's Financial Services Authority said it was pushing back its planned assumption date for insurers to comply with Solvency II to 2014 instead of 2013.

Barnier also used his speech to back the development of a common framework for supervising internationally active insurance groups, currently being conducted under the umbrella of the International Association of Insurance Supervisors.

The IAIS is also working with the Financial Stability Board to consider whether insurers whose failure could cause financial instability should have to hold extra requirements, such as a capital surcharge.

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