29 November 2013

Five years of InsuranceERM, five years on the tortuous journey towards Solvency II

InsuranceERM was launched five years ago, in November 2008, when implementation of Solvency II was less than four years away. Now, it's still over two years away and a lot of water has passed under the bridge. Delving into the InsuranceERM archives, Peter Field charts the ebbs and flows on the way to the European Parliament vote last week for a January 2016 go-live date for Solvency II

When I started InsuranceERM in November 2008, somebody told me that I'd left it a bit late if I wanted to get the most out of covering Solvency II.

But I thought that the scope of the proposed regulation, like Basel II and then Basel III, was so far-reaching that even if the deadline of 31 October 2012 were met, there would be plenty of implementation issues and loose ends to provide copy for years.

As it's turned out, we're nowhere near Solvency III; indeed, transitional measures in the deal agreed last week in Europe mean complete implementation won't happen till 2032. I should have realised that one of our first stories in November 2008, "Solvency II schedule slips," was a precursor of many more delays.

Of course, InsuranceERM hasn't just been about Solvency II, which is why that is not part of the title (which was originally Insurance Risk and Capital.) The thinking behind Solvency II is part of global trend to more sophisticated and holistic risk management by insurers.

Some countries are already ahead of the EU in their adoption of this approach. Hence, InsuranceERM has reported on the Swiss Solvency Test, Australia's Lagic standards, South Africa's Solvency Assessment and Management (SAM) project (due to be fully implemented in 2016) and the US ORSA (due in 2015.) Features on Latin America and Asia, as well as "Solvency II goes global" also attest to the propagation of the enterprise risk management gospel.

But Solvency II has undoubtedly dominated our content in the past five years, and the distillation of our news items on this subject that follows gives a flavour of the arguments, negotiations and compromises which led last week to Europe setting a firm date for the new insurance framework.

Delays and consultations

Solvency II schedule slips - 28 November 2008

The European Parliament's plenary vote on the draft Solvency II directive has been pushed back to 3 February 2009, according to a source at the Parliament... The vote was originally scheduled for 3 December 2008.

Solvency II "will most likely be delayed" - 17 February 2009

At last, a Solvency II compromise is agreed - 26 March 2009

European Parliament votes for Solvency II - 23 April 2009

The European Parliament has formally voted to approve the Solvency II level one directive text, after months of negotiations.

Consultation on level two implementation announced - 4 June 2009

Insurers underestimating cost of Solvency II? - 15 July 2009

A survey reveals that 61% of UK insurers believe that the cost of implementing Solvency II will be less than £500,000, with a further 8% still having no idea of the cost.

CEIOPS completes level 2 advice - 30 November 2009

The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) today published consultation paper 78 on the criteria for third country equivalence under Solvency II.

QIS5 taskforce created - 28 January 2010

CEIOPS launches level three guidance - 28 January 2010

 

Postponing Solvency II implementation – first time – and QIS5

EC looking at 2013 Solvency II start date - 17 March 2010

EC's QIS5 draft is big relief for insurance industry - 16 April 2010

CEIOPS reports 70% participation in QIS5 - 16 December 2010

QIS5 results in 44% drop in insurers' capital surplus - 14 March 2011

QIS5 has resulted in a reduction of insurers' and reinsurers' capital surplus of 44%,or €86bn, compared to the calculation under Solvency I, according to the report issued today by the European Insurance and Occupational Pensions Authority.

 

More delays

Finalisation of Omnibus II directive postponed - 11 May 2011

Omnibus II will now be considered by the European Parliament in January 2012, after a revised timetable for the directive was issued.

Pressure mounts as Solvency II's timetable remains uncertain - 09 June 2011

EU proposes January 2014 for Solvency II start - 23 June 2011

European Parliament agrees with Solvency II delay - 29 July 2011

 

Solvency II for pension funds becomes an issue

CEA calls for level regulatory playing field for IORPs - 16 August 2011

Eiopa's IORP directive has "catastrophic potential" - 25 October 2011

 

ORSA, reporting and modelling

Eiopa launches ORSA consultation - 07 November 2011

Eiopa launches consultation on reporting - 8 November 2011

FSA spells out conditions for early use of Solvency II models - 9 December 2011

 

More delays in Europe

Solvency II ECON vote delayed again - 13 January 2012

"No suggestion that SII dates beyond 2014 will change" - 16 January 2012

Final SII standards and guidelines planned for September - 25 January 2012

Barnier denies Solvency II delay - 26 January 2012

Parliament delays Omnibus II vote as talks break down - 08 March 2012

 

Europe bows to inevitable on timing

European Parliament and Council formalise delay in SII - 22 May 2012

Omnibus II plenary vote delayed again - 02 July 2012

 

ORSA takes final shape

Final report on draft ORSA guidelines published - 12 July 2012

Eiopa report means big changes to firms' reporting processes and systems - 13 July 2012

 

Long-term guaranteed products centre of final battle

Trialogue deadlocked over long-term guaranteed products - 13 July 2012

Omnibus II vote delayed yet again - 31 August 2012

Commission proposes impact study on long-term guarantees - 19 September 2012

Solvency II implementation "probably in 2016" – Bernardino - 18 October 2012

 

The original date for SII to be in place!

31 October was meant to be Solvency II day - 31 October 2012

Solvency II may never be implemented, says L&G - 2 November 2012

 

Insurers and national regulators take matters into their own hands

Insurers scrap Solvency II teams - 14 November 2012

BaFin to introduce Solvency II elements - 16 November 2012

Dutch insurers to use ORSA ahead of Solvency II - 19 November 2012

Ireland to adopt pillar 2 before Solvency II - 10 December 2012

French want Solvency II pillar 2 and 3 early - 17 December 2012

Solvency II pillars 2 and 3 will be implemented by 2014, says Eiopa - 20 December 2012

Eiopa launches LTG assessment - 28 January 2013

Omnibus II delayed to October - 20 February 2013

 

IORP thwarted

IORP QIS "complex and costly" - 9 April 2013

Solvency II for pensions off the table - 24 May 2013

 

Some movement on guaranteed products and Omnibus II

Eiopa drops counter-cyclical premium, extended matching adjustment in LTG report - 14 June 2013

Omnibus II vote set for 11 March - 4 September 2013

Eiopa eases reporting requirement in Solvency II preparation guidelines - 27 September 2013

Eiopa chief raises concerns on Omnibus II compromise - 1 October 2013

 

January 2016 it is...or 2032 for transitional arrangements

Quick-fix directive to postpone Solvency II to 1 January 2016 - 2 October 2013

Solvency II on track after Omnibus II agreement - 14 November 2013

Parliament confirms Solvency II date change - 22 November 2013