Solvency II: When, oh, when?

Solvency II has always seemed a bit rushed by this observer on the left side of the Atlantic. Now Reactions offers free commentary that at least one Aon executive predicts delay of another year.

Writing an op-ed in the Baden-Baden Reporter, which will come out at the conference next week (and go online then), Aon Benfield co-CEO for EMEA Richard Posgate says it is becoming more and more unlikely that everything will be ready in time, and that he will not be surprised to see the whole process being delayed for another year.

That’s 2014 then.

The problems:

  • The latest quantitative test, QIS5, is due starting Oct. 31. The template that companies needed to fill out was issued Oct. 6.
  • The European regulator CEIOPS only just requested data to see whether property-casualty capital requirements have been set too high.

All of that has actuaries scurrying, I’m sure. But it’s also looking like there aren’t enough regulators:

“There are just a bunch of people in London and Frankfurt really driving the project and they are over-stretched. And every regulator in every country is struggling to get to grips with how Solvency II will affect every insurer in their jurisdiction. It is an unbelievable challenge for everyone involved.” So says Marc Beckers, co-head of Aon Benfield’s Risk & Capital Strategy team in the UK and EMEA, in another op-ed due to appear at Baden-Baden.

More delays would be unfortunate, of course, but the U.S. strategy undertaken by the NAIC starts looking good. NAIC will be tweaking its current capital standards model, hoping to have a model law in place by December 2012.

After that, state legislators would have to pass the law, so implementation might wait until 2014 or so. But now S-II may be moving to approximately the same timetable, with twice the agita.

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