Solvency II begins long road ahead

After years of discussion, the framework directive has been published. However, a delay has already been factored in with the rules not expected to take effect before 2012. In this article, IR&A identifies the potential areas for conflict in political negotiations and looks at the discussion surrounding the implications for firms.

In July, the European Commission published one of the most important documents for insurance regulation in decades. Although a milestone in itself, publication of the framework directive is only the start, but is in itself a significant achievement given the amount of controversy that several of the key issues have generated between member states. From use of the internal model to group supervision and even the most appropriate capital approach have all created friction between some of the more progressive member states, and in particular the UK, and those more reluctant to make such a radical change.