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Speaking at the Multaqa conference in Doha this week, Karel Van Hulle, former head of insurance and pensions at the European Commission, said: "There is no doubt that the reporting aspects of Solvency II are very complex and require a lot of investment. It may be that some insurers will not be ready. But I do know that there are transitional regimes so the new regime will kick in gradually."
He added: "It would be naïve to think that with a major reform like this everybody will be there with everything on day 1...The laggers will be dragged on by the ones that are already over the line. Supervisors will use their influence to stimulate companies to provide the necessary information.”
Commenting on the possible sanctions that might face insurers who miss the 1 January, 2016 reporting compliance deadline, Van Hulle said: "The sanctions will be part of individual supervisors' frameworks. They will use whatever powers they have to make sure that if there are problems, they are dealt with as quickly as possible-because it is in their interests to deliver.
"If supervisors don't collect the information for EIOPA, they themselves will get beaten up. Everybody has an interest to make sure that the system works."
Van Hulle said he is confident that all European Union member states would have their rules in place in time for the 2016 Solvency II implementation deadline.
However, some companies might not meet the fundamental solvency requirements under the new regime, Van Hulle fears: "They will have to be dissolved or put into run-off. Some companies will want to merge with other companies. Medium sized companies will find compliance more difficult than the small ones. That's because small companies usually know their markets very well while medium sized ones don't know what market they want to be in and run into difficulties."
"If the problems are not too big then the relevant supervisor will work with insurers to resolve them," Van Hulle said. "Dialogue between supervisors and supervised entities will be very important."