Regulator: Solvency II delay is damaging EU credibility abroad

The letter, addressed to the European commissioner for internal market and services, expressed Eiopa’s concern that the negotiations on Solvency II have become “stagnant”.

Chairman Gabriel Bernardino wrote: “The lack of certainty about the implementation [of Solvency II] is undermining EU credibility in international discussions.”

In the letter, he called for the commissioner to “come up with a sound and reliable timetable for the implementation of Solvency II as soon as possible”.

Bernardino wrote that the “credibility of the project” is at stake. “The timetable should consider a realistic assessment of the expected time needed to deliver the different milestones and it should be appropriately communicated to all stakeholders in order to eliminate the current uncertainty,” he said.

The chairman even called for the “possibility of earlier implementation of some Solvency II elements” in order to counter the slow negotiations.

The typewritten letter originally began “Dear Commissioner Barnier” but Bernardino crossed out “Commissioner Barnier” in blue ink and penned “Dear, Michel”.

Commenting on the letter, David Hare, president of the Institute and Faculty of Actuaries, said: “This is a very helpful intervention from Eiopa. UK firms have already invested a lot of resources in preparing for what is needed to implement Solvency II. It is vitally important that momentum is not lost and that clarity on the timetable is provided.”

James Walsh, the National Association of Pension Funds’ senior policy adviser, said: “While this letter is about insurance legislation, there are important lessons for pensions policy. The continuing difficulties in finalising Solvency II underline the importance of thinking through the even more complex issues involved in revising the IORP directive.

“Only this week Eiopa said that the commission must take much longer to get the IORP review right. We agree with that view.”

Darren Philp, NAPF policy director, added: “Solvency II-type proposals could have extremely damaging consequences for our pensions and the wider economy. They would hit businesses running final salary pensions and would also take jobs and investment out of the UK’s faltering economy.”