Insurance Quarterly Legal And Regulatory Update
The Solvency II Directive has moved a step closer to implementation following a vote held on 22 March 2012 in which the European Parliament's Economic and Monetary Affairs Committee ("ECON") passed the majority of the Omnibus II proposals.
In its vote, ECON acknowledged the need for a matching premium (or "matching symmetrical adjuster") and for a mechanism that would enable insurers to avoid the forced sale of their assets in adverse market conditions at a time when the insurer's liabilities have not crystallised. Details as to the workings of such a mechanism are yet to be agreed upon.
However, not all issues have been resolved from an insurer-perspective. Under Omnibus II, Member States will gain the right not to recognise equivalent group supervision. While details on general temporary equivalence were established for certain third countries, no reference was made to the "different approach" that is said to be required for the US. The current text includes conditions that the US will be incapable of meeting.
Omnibus II will now be the subject of trilogue discussions between the European Parliament, the Council of Ministers and the...