Publication of final EIOPA guidelines signals renewed effort towards Solvency II finalisation

On 27 September European Insurance and Occupational Pensions Authority (EIOPA) published its final guidelines for the preparation of Solvency II. In finalising the guidelines, EIOPA has taken into account comments received on a consultation performed earlier in the year. However, in most instances, the changes from the original guidelines are limited, demonstrating EIOPA's commitment to the preparatory guidelines.

The guidelines cover 4 key (and well developed) areas in Solvency II:

  1. System of Governance
  2. Forward looking assessment of own risks (based on ORSA principles)
  3. Submission of information to National Competent Authorities
  4. Pre-application for internal models

The guidelines are due to come into effect from 1 January 2014 with a phasing in approach into 2015 applied in some areas. We expect the PRA and other national supervisors to respond to EIOPA before the year end on their intentions to comply with these guidelines, or to explain why they will not. UK insurers should be monitoring developments at the PRA to ensure they are prepared to meet its expectations in 2014 and 2015.

The publication of these guidelines represents a key milestone in the road to formal Solvency II implementation. The key remaining hurdle is the current negotiations between the trilogue parties on which we should hear further news in the coming weeks on the likelihood of a successful conclusion.