"It is forecasted that Solvency II will go into complete effect on January 1, 2013," warned Michael Barnier, a conservative Frenchman and European Commissioner of Interior Market and Financial Services.
The warning arrived in the insurance sector through a letter from the EU commissioner for internal market and services dated June 1, to which elEconomista has had access.
Where it is necessary, the European Commission will introduce means for guaranteeing a smooth transition. "I am against delaying the introduction of Solvency II," said Barnier. "Solvency II is a much-needed directive and it is critical that everyone involved guarantees that they are prepared on time for its application."
The European Commision proposed Solvency II in 2007 after two years of negotiations and adopted by the governments of 27 countries of the EU and by European Parliament. It is a new norm that updates old legislative framework in the insurance sector and reduces a maze of 14 directives to a single text.
The principal objective? To strengthen the supervision, regulation and solvency of the insurers. It is for insurers what the Basel is for banks: a demand that entities are supplied with their own capital reserves in proportion to their risks. Barnier´s letter is directed to the leaders of four of the lobbies that defend the sector?s interests: the Paneuropean Insurance Forum (PEIF), the European Insurance and Reinsurance Comission (CEA), the CFO Forum and the CRO Forum.
Barnier´s letter responds to a letter that these organizations sent and published in March. This letter expressed their "great preoccupation" for the harm that the Solvency II´s new rules can cause to the sector. Rules that they consider to be "too conservative," represent a threat to insurance companies who need to offer appropriate coverage to their clients for the long term and at adequate prices.
Edited in English by Brandon Dyches and Jose L. de Haro (for comments contact: joseluisdeharo@eleconomista.es)
