The trilogue discussions between the European Commission, Council and European Parliament are now underway. Over the coming weeks the institutions will attempt to agree a final version of the Omnibus II Directive. One of the crucial technical issues to be decided is the process for developing Solvency II's level 2 implementing measures – the outcome of which will have implications for the balance of power between the Commission and the European Insurance and Occupational Pensions Authority (EIOPA).
The issue is on the legal form of the level 2 implementing measures for Solvency II, which set out the detailed requirements of the rules. The draft Omnibus II Directive released by the Commission in January 2011 provided that implementing measures must take the form of either delegated acts or implementing technical standards. However, the European Parliament's draft Omnibus II text suggests changing the majority of delegated acts into regulatory technical standards.
Transforming delegated acts into regulatory technical standards would significantly increase EIOPA's power, as the responsibility for drafting regulatory technical standards lies with EIOPA. While the Commission may adopt EIOPA's draft in full or suggest amendments, EIOPA will ultimately have the powers to influence the final shape that regulatory technical standards will take.
Delegated acts, in contrast, are drafted by the Commission. It must consult experts from Member States, but is not bound by their opinion, and any provisions would ultimately need to receive the support of the Council and Parliament
A crucial difference between the two instruments, however, is that – as the name suggests – regulatory technical standards can only be used in relation to technical issues. According to the regulations establishing EIOPA, regulatory technical standards "shall not imply strategic decisions or policy choices and their content shall be delimited by the legislative acts on which they are based".
This raises the crucial issue of what implementing measures can be classed as 'technical' and what can be established as 'strategic decisions or policy choices'.
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