A.M. Best considers the signing of the Omnibus II directive to be a significant step toward the adoption of Solvency II.
The rating agency has stressed that any further delays to the legislation will add additional financial burden to insurers.
The introduction of Solvency II has been postponed a number of times in recent years, and is now due to take effect on 1 January 2016. Since its inception 13 years ago, and particularly since the financial crisis, delays have been a source of frustration for the insurance industry. The delays have caused additional costs for insurance companies, as they have staff members dedicated to the legislation.
A.M Best sees the trialogue agreement reached on 13 November as a major development. In a statement, the company said: “ It clarifies the treatment of problem areas of the new legislation, such as how much capital is needed to back long-term guarantees on life and health products.”
The rating agency believes that the Insurers it rates highly would like Solvency II to become live as soon as possible. While there are some exceptions, with a minority of insurers still behind schedule, generally rated entities are now fully prepared to adopt Pillar I and Pillar II.
