|
|
Although some clauses were rejected, most of the Directive’s proposals were passed, including a last minute agreement to appease insurers’ concerns over matching premium rules. Insurance Europe welcomed moves in this area for non-life insurers, but remains disappointed with the provisions that deal with these long-term guarantees for life insurers.
Prior to the vote, PwC said a last minute deal was struck by parliament not to drop matching premium rules. Matching premium rules will determine whether insurers will be able to adjust discount rates to reflect the risks being run on certain long-term insurance products such as annuities. If the matching premium is dropped, as previously proposed, this will have a serious impact on some insurers' ability to provide affordable long-term insurance products and also on insurers’ investment portfolios.
Insurance Europe said it welcomes the approval of appropriate matching premium provisions for non-life and health insurance. It hopes to see these included in the final Omnibus II Directive. It remains disappointed by provisions relating to long-term guarantees for the life sector.
“The current text contains the package of measures that could, in principle, ensure that risks are correctly measured and avoid artificial balance sheet volatility but [we] regret that it currently includes inappropriate restrictions that would prevent these measures from working as intended”, it said.
Janine Hawes, Solvency II Director at KPMG, said: “The proposals for temporary equivalence have not been modified to include a process for establishing this for the US. The current text includes conditions that the US would not be able to meet. Today’s version of Omnibus II also maintains the one-year differential between regulators gaining their powers and firms complying with Solvency II, which remains scheduled for January 1, 2014.”
If a positive vote on Omnibus II is reached at the first parliamentary vote on July 2, then there is a strong chance that Omnibus II will be able to appear in the Official Journal shortly after parliament’s summer recess, allowing the release of the next stages of Omnibus II.