Michel Barnier, the European Commissioner responsible for overseeing implementation of Solvency II, has reportedly proposed studying the directive's impact on EU insurers before moving forward with rulemaking.
The European Insurance and Occupational Pensions Authority (EIOPA) has indicated that it stands ready to carry out such a study by March 2013.
Currently the Commission is still engaged in “trilogue” discussions alongside the European Parliament and EIOPA to assess Solvency II's potential long-term impact.
As part of Barnier's plan to address concerns the directive was being written in haste, Barnier suggested delaying Solvency II's go live date by one year to 2015, according to a Reuters’ report.
Currently Solvency II will require EU member states to transpose the directive into national law by next June, and for insurers to apply the new rules by 2014.
“Making sure that EU rules favour long-term investment for our economies is key for Commissioner Barnier, as is improved risk management for the insurance industry,” said his press office in an email to PE Manager.
“It is too early to say today whether the options currently explored in the trilogue will push back the foreseen implementation dates of Solvency II. The issue of the entry into force will need to be clarified by all parties in the trilogues over the coming weeks.”
Solvency II requires insurers to hold varying levels of capital based on the riskiness of an asset. For private equity holdings, insurers are required to set aside €49 for every €100 invested.
The issue is also not just a European problem. The directive requires non-EU insurers and reinsurers to meet an “equivalency test” to gain certain privileges, including lower capital holding requirements.
However insurers may adopt their own internal risk models should they find the standard model provided by regulators too cumbersome. But doing so requires significant time and expense, according to industry sources.
And even if such a model were developed it would have to be first approved by a time-strapped EIOPA before it could be put into practice, note the directive's critics.