Solvency II Still Possible For "Soft Launch" In Jan 2013

The upcoming Solvency II capital regime for European insurers could still be implemented as scheduled with a transitional "soft launch" in January 2013, a Member of the European Parliament said Thursday, seeking to allay recent concerns that the new rules may be delayed by a year.

"The European Parliament has adopted Solvency II way back in 2009. People have asked whether it will ever come to pass. We're working on that, and we still intend for it to come to pass in January 2013 for a 'soft launch,'" said Peter Skinner, who is also a member of the European Parliament's Committee on Economic and Monetary Affairs.

A soft launch means that the responsibilities of country supervisors relating to Solvency II will start Jan. 1, 2013, with implementation by insurance companies coming after that.

"After working on a text called Omnibus II, which is an implementing approach and instrument needed by regulators to do the job they need to do, we should be able to move rapidly into the implementing measures," Skinner told participants of an insurance conference sponsored by The Economist.

Skinner later told reporters his committee will have a vote on the current Solvency II document on March 20 and 21. This will then be discussed in a "trialogue" between the European Council, Parliament and Commission between April and July.

Insurers have been concerned about a potential delay of Solvency II, after having already spent huge amounts in preparing for compliance with the upcoming rules. They fear a delay if time runs out in debating certain provisions of Solvency II.

Experts have previously said that compliance would likely force European insurers to spend more than the EUR3 billion estimate of the European Commission.

In the U.K., insurer Prudential PLC (PUK) recently said it is looking into whether it should move its headquarters away from London due in part to the uncertainties around Solvency II.

"We need haste to make this agreement and convert it into different languages and make transcripts ahead of a full plenary of the European Parliament in October," Skinner said.

"We can do this. We can take the agreement that we'll have with the Council and wrap it up, take in the amendments in Parliament and then it becomes official law," he said.

"We can have this law in place for soft launch in Jan 1, 2013. I'm confident," he said.

- By Vladimir Guevarra, Dow Jones Newswires. Tel. +44 (0) 2078429486, vladimir.guevarra@dowjones.com

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