They said it would never happen again, but it appears that the Solvency II deadline has been postponed once more. The Council of Europe, on which the member states sit, has agreed a proposal that Solvency II should now come into force from 1 January 2014, a year later than the previous timetable of New Years Day 2013.
Many industry experts have voiced their concerns about the implication of Solvency II. Back in March, four pan-European insurance bodies wrote a damning letter to the European Commission over developments with the Solvency II process, warning that the project’s failure will have dire industry consequences.
While this recommendation to change the implemation date has yet to gain approval from the European Parliament, and that is unlikely to happen until later this year, it does begs the question “How does this delay impact the European Insurance Industry?”A survey by KPMG in July 2010, shows an alarming 45 percent of insurance companies had not yet started their Solvency II projects! But it is imperative that even with this delay in the deadline that insurers press ahead with their current plans and timetable. Any distraction now could prove costly.
In the long term, if the anticipated benefits of better risk management and improved transparency are realized, then this delay is unlikely to have serious consequences to the European Insurance industry.
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*NOTE: This post was originally published in SAS Voices.>