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The key insurance project to be delivered by EIOPA during 2012 continued to be Solvency II. Whilst 2012 was marked by the continuing negotiations between the European Parliament, the Council and the European Commission on the Omnibus II Directive, EIOPA has been active in developing regulatory provisions to support the Solvency II regime and encouraging national supervisors and insurers to prepare for the new framework.
Omnibus II Directive and the path to Solvency II
The Omnibus II Directive will revise a number of aspects of the Solvency II Directive. There is continuing discussion, in particular, on the sustainability of long-term insurance guarantees, the volatility of elements in undertakings’ solvency balance sheets and reporting and disclosure requirements. EIOPA provided technical and analytical support to the parties involved in negotiating the OMDII (representatives of the EP, Council and EC or the trilogue). During the summer of 2012, EIOPA was asked to conduct an impact assessment of the long-term guarantee aspects of Solvency II in order to support the co-legislators in their decision on the OMDII.
It is not expected to be possible to implement the full Solvency II regime by its intended date of 1 January 2014. EIOPA was concerned about this development and in a letter to the Trilogue parties on 5 October 2012 the Chairman of EIOPA expressed the need to reflect on an earlier implementation of some Solvency II elements in order to address the concerns raised in the letter. In response to this, Commissioner Barnier proposed, in a letter dated 8 November 2012, that EIOPA should act to ensure that there is convergence towards a Solvency II approach, within the limits possible under the current legal framework. As a result, on 20 December 2012 EIOPA published an Opinion, advising National Supervisory Authorities (NSAs) to take steps to prepare certain important aspects of Solvency II.
Other preparations being made by EIOPA to implement Solvency II
As well as drafting regulatory measures to support the consistent and convergent application of Solvency II, EIOPA is also preparing to undertake a number of tasks that it is expected to take charge of once the Solvency II regime applies. This includes:
Occupational Pensions
The main focus of EIOPA’s work on occupational pensions in the first quarter of 2012 was on the finalisation of EIOPA’s Advice on the review of the Directive 2003/41/EC (IORP Directive). The Advice was delivered to the European Commission on 15 February 2012 and was published on the same day together with all the consultation responses and EIOPA’s resolutions to the comments received.
EIOPA’s Advice acknowledges the social and labour law context for IORPs and recommends:
Quantitative Impact Study
The Advice also emphasises the importance of the Quantitative Impact Study (QIS) which was undertaken in 2012 and the importance of proportionality in the IORP context. As a further step to its Advice, EIOPA developed technical specifications for the first QIS in the occupational pensions’ area. The QIS exercise ran from 16 October 2012 to 17 December 2012. There were eight countries participating in the QIS: Belgium, Germany, Ireland, the Netherlands, Norway, Portugal, Sweden and the United Kingdom.