Europe’s insurers are making progress towards implementing Solvency II by the end of this year, according to a survey conducted by Insurance Europe.
The survey revealed that many insurers are concerned about the pressure they face due to additional last minute requirements that are being imposed in the run-up to the regime coming into force.
The survey, which covered companies that account for 90 percent of European insurance premiums, found that a clear majority are making good progress in implementing the first two pillars of Solvency II.
It also revealed that the majority of insurers feel that risk management and governance have already improved as a result of the introduction of the new regime.
But many respondents are concerned that the final version of the quantitative reporting templates, which insurers need to comply with for the third pillar of Solvency II, will only be adopted by the European Commission in September, just four months ahead of when the new regime starts.
Igotz Aubin, head of prudential regulation at Insurance Europe, commented: “It is encouraging to see that Europe’s insurers have made such substantial progress in their journey towards implementing Solvency II, especially given that this task has been completed during a particularly challenging time for the industry.”
“However, this survey has also revealed a number of serious issues that need to be acknowledged.”
The concerns include that most national supervisors intend to fully comply with approximately 700 guidelines issued by the European Insurance and Occupational Pensions Authority (EIOPA), often on its own initiative.
These guidelines add around 1,100 pages to Solvency II and increase the implementation burden.
Work to comply with further additional requirements set by member states is slowing down the implementation process.
Due to the volume of items that require approval from supervisors under Solvency II, a flurry of applications for approval could be submitted at a time when supervisors’ resources are already stretched.
Finally, extensive documentation requirements are delaying the approval process of internal models, with nearly all respondents warning that supervisors’ demands in this area are too burdensome.
