The European Parliament has rescheduled the plenary vote of the Solvency II directive from 20 November 2012 to 11 March 2013.
No new timetable has been confirmed and 1 January 2014 is the Europe-wide implementation date, though this implementation looks increasingly unlikely.
“We are considering the implications of the delay for our domestic implementation plan and will communicate with the industry as soon as we can” said a statement from the UK FSA.
The matching adjustment is thought to be the cause of the delay. Concern was raised in April over the issue, and the Association of British Insurers has been lobbying for restraints to be eased.
Originally called the matching premium, the concept was welcomed by insurers, which said that it was key to their ability to offer inexpensive long-term annuity products.
However, unease has been circulating about the severe limitations of its use and the lack of clarity about its exact operation.
The delays may come as a welcome relief for some firms that are behind with their implementation, but for those pursuing internal model approval, costs of keeping both ICAS and Solvency II models running together could be steep.
