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Julian Adams, Executive Director of Insurance at the Bank of England, warns insurers that they still have some way to go to prepare for Solvency II.
Adams was responding to the December Supervisory Statement 4/13 by the Prudential Regulatory Authority (PRA) ‘Solvency II: applying EIOPA’s preparatory guidelines to PRA-authorised firms’.
While companies have made some advances to understand their models and develop their Own Risk Solvency Assessment (ORSA), the PRA believes the market needs to focus the most effort on being ready for Solvency II reporting.
Accenture’s SII Road Map has been developed to support insurers with their SII implementation milestones and maximise the resources available for interim and Solvency II reporting.
On 12 December, the Prudential Regulatory Authority (PRA) published Supervisory Statement 4/13 ‘Solvency II: applying EIOPA’s preparatory guidelines to PRA-authorised firms’ for all firms within the scope of the Solvency II Directive. The PRA also hosted a briefing led by Julian Adams, the Deputy Head of the Prudential Regulation Authority and Executive Director of Insurance.
The key messages of the speech were that:
There is now certainty on the implementation timetable with commencement date confirmed for 1 January 2016.
The transposition date for Solvency II to member state law is set for 31 March 2015 and therefore from 1 April 2015, local regulators will be empowered to give Solvency II related approvals. This effectively gives firms 15 months to prepare for Solvency II.
The Omnibus II Directive is scheduled to be tabled for a plenary vote in the European Parliament in the first quarter of 2014. A positive outcome will trigger the next stages of legislation and regulation (delegated acts and technical standards).
The European Commission intends to publish delegated acts in summer of 2014 – with a stable version being ready by March 2014.
Implementing technical standards are expected to be produced by the Commission in three waves in the run up to the transposition date of 31 March 2015. The Commission expects to adopt the first wave of implementing technical standards in October 2014.
All firms (including smaller firms) are expected to make preparations for Solvency II appropriate to the nature, scale and complexity of their business.
With the increased certainty on the timetable, insurers should expedite the refresh of their roadmaps for Solvency II reporting implementation, not only for compliance in 2016, but also for enhanced reporting capability once compliance is achieved. Accenture’s view is that these milestones will help firms maximise the resources available for interim and Solvency II reporting:
February 26, 2014
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