Over two thirds of respondents (68%) to an Insurance Europe survey have indicated that Solvency II has been gold plated in their market as supervisors impose additional last minute requirements, according to the European insurance and reinsurance federation.
The survey, which was carried out in November and covered companies that account for 92% of European insurance premiums, revealed an almost threefold increase from a previous survey carried out in June, which found that around 25% of member states were augmenting Solvency II requirements.
The latest survey also revealed that the number of respondents whose supervisor was interpreting Solvency II in a conservative way has also increased, up from 39% in June to 47% in November. However, despite all of these challenges, the survey confirmed that the vast majority of Europe’s insurers will be ready to operate under Solvency II from January 2016.
Igotz Aubin, head of prudential regulation at Insurance Europe, commented: “These additional requirements and conservative interpretations come at an extremely challenging time for the industry. This is further compounded by the fact that the final quantitative reporting templates have only just been adopted by the European Commission, meaning insurers only recently received clarity on reporting requirements. These issues illustrate the significant challenges which insurers face as they approach 1 January 2016, when Solvency II comes into force.”
The survey did, however, find a wide range of areas that respondents believed had seen improvement due to Solvency II. 79% of respondents said that governance had improved, while 74% reported that risk monitoring and identification processes had been enhanced and 63% felt that data quality had increased.
Aubin added: “It is great to see Europe’s insurers making such good progress in implementing Solvency II, despite the challenging environment they face. However, I would like to stress that Solvency II is already an extremely conservative and extensive regime. It is, therefore, important — especially at this late point — to limit additional requirements and conservative interpretations.”