Insurance Quarterly Legal and Regulatory Update Q2 2013

Author:Ms Mary Canning, Breeda Cunningham, Michele Barker and Matthew Ryan
Profession:Dillon Eustace
 
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Solvency II

(i) Solvency II Implementation Timeline

Following the publication of EIOPA's Opinion on Interim Measures, the Central Bank of Ireland (the "Central Bank") has confirmed that full implementation of Solvency II will be delayed beyond the implementation date of 1 January 2014 set out in the "Quick Fix" Directive (2012/23/EU). To date, there is no publicly available revised timetable for the implementation of Solvency II, however, the Opinion published by EIOPA proposes that national competent authorities should introduce certain aspects of the prospective and risk-based supervisory approach in order to promote supervisory convergence.

These proposals cover:

An effective system of governance; An effective risk-management system including a forward looking assessment of the undertaking's own risk (based on ORSA principles); The pre-application of internal models; and Reporting to supervisors. (ii) Omnibus II Directive

The draft Omnibus II Directive amends the Solvency II Directive to take account of the changes introduced by the Lisbon Treaty and also the new financial supervision measures introduced in the EIOPA Regulation (Regulation 1094/2010). Adoption of this Directive requires agreement from the Trialogue parties (the European Parliament, the Council of the EU and the European Commission). The negotiations on this Directive have been further delayed as a result of the Long Term Guarantee Assessment (see section (ii) of EIOPA Updates below) and as such the plenary vote of the Omnibus II Directive has been rescheduled from 10 June 2013 to 22 October 2013. For forecast updates please see the link below:

http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?id=589513

EIOPA Updates

(i) EIOPA launches public consultation on guidelines related to the preparation for Solvency II

As a follow up to the Opinion on Interim Measures issued in December 2012, EIOPA intends to publish guidelines later this year addressed to competent authorities on how to proceed in the interim phase leading up to the introduction of Solvency II. On 27 March 2013, EIOPA launched its public consultation on these guidelines which covers the areas of:

The system of governance; The forward looking assessment of the undertaking's own risks (based on the ORSA principles); The submission of information to national competent authorities; and The pre-application for internal models. EIOPA welcomes comments from all interested parties and these comments should be submitted before the deadline of 19 June 2013. EIOPA intends to publish the responses to this consultation in the Autumn.

Within two months of publication of the finalised guidelines, competent authorities must confirm whether they comply or intend to comply with the guidelines. If the competent authority does not comply, or does not intend to comply, it must inform EIOPA, stating the reasons for noncompliance. These consultation papers can be found at the following link:

https://eiopa.europa.eu/consultations/consultation-papers/index.html

(ii) EIOPA launches long term guarantee assessment

EIOPA launched the long term guarantee assessment ("LTGA") impact study agreed by the Trilogue parties (the European Parliament, the Council of the EU and the European Commission) in the context of the Omnibus II Directive negotiations on 28 January 2013.

The stated goal of the LTGA is to assess the effects that the implementation of the various elements of the package may have on policyholders and beneficiaries, insurance and...

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