A new delay to a key European Parliament vote means it is effectively impossible the Solvency II rules governing Europes insurance industry will apply from January 2014 as planned, KPMG said today.
The plenary vote on the Omnibus II legislation that has to be passed before Solvency II can be introduced was scheduled to take place in November but has now been pushed back until a 'forecast' date of March 11-14 2013.
This follows comments made last month by the European Commissioner responsible for the legislation, Michel Barnier, stating that political agreement on the legislation might not be reached until a new impact study on aspects of Solvency II was completed. This is expected in March 2013.
In light of this, Janine Hawes, insurance director at KPMG, said that the news of the vote delay did not come as a surprise and the insurance industry had 'all but given up on 2014' as a viable date for the implementation of Solvency II.
'No reason has been given for the delay in the plenary vote; however it is likely to be to accommodate the forthcoming impact study to assess the effect of the various proposals on the long-term guarantee package,' she said.
'This will take place later this year and the timing of this vote suggests that the trilogue process will now largely be stalled until the results of this study are known.'
Ms Hawes noted that, despite calls for a clear timetable on the legislation - including a letter sent to Barnier by the European insurance regulator last week - no such announcement had been made.
'The challenge now is how quickly the results of the impact study can be assessed and the speed with which an agreed solution can be reached in the trilogue process when it resumes,' she said. 'The new indicative date for the European Parliament's plenary vote may also need to be moved back further to accommodate this.'
'The dates for transposition and implementation of Solvency II will also need to be amended again, with a second short "quick fix" directive required. The question that remains is whether this will be a delay of one or two years.'