The European Insurance and Occupational Pensions Authority has published final guidance for insurers and regulators on how they should prepare for the Solvency II risk-based supervisory system.
This will permit a gradual and proportionate approach to Solvency II through 'phasing in', the authority said, although national supervisors will be expected to ensure insurance companies and groups take active steps towards implementation.
It will be up to individual National Competent Authorities (NCAs) to decide how best to incorporate the guidelines into their national regulatory or supervisory frameworks.
EIOPA chair Gabriel Bernardino thanked all respondents to the consultation exercise who, he said, had provided 'invaluable input'.
'[Stakeholders'] comments and suggestions helped us to refine the content and achieve a better-balanced approach to the preparatory phase. Together we have made a decisive step towards Solvency II.'
Bernardino added that the guidelines were a 'key step' to ensuring preparation was done in a consistent manner and for the benefit of the internal market, industry and consumers.
EIOPA said it planned to issue the guidance in all the official European Union languages on October 31 with an application date of January 1 2014. NCAs will be expected to report to EIOPA about their compliance within two months of the guidelines' issuance. A further progress report will be expected in February 2015.
Responding to the announcements, Peter Ott, KPMG's European head of Solvency II, said: 'We are pleased that EIOPA have taken on board industry feedback and modified their proposals slightly. However, the parallel running of current and future regulatory systems will still cause resource constraints.'