UK to "pilot" new regime if SII deadline delayed

Law firm Eversheds has said UK insurers may decide to keep to the current timeframe, despite speculation that the European Commission is set to delay the Solvency II implementation for another 12 months, to give countries and regulators more time to prepare.

According to Michael Wainwright, partner at international law firm Eversheds, Solvency II has been the Financial Services Authority’s largest ever project and a "massive cost" for  UK insurers that have paid a levy to the FSA on top of their own costs of implementation.

"Despite this investment, the FSA has struggled to resource the project," said Mr Wainwright. "So it is small wonder that other European regulators have underestimated the challenge and are now pleading that they need more time. A possible outcome is that the UK will implement in 2013 and other regulators will implement in 2014."

He continued:"This is not an ideal result for UK insurers, but it may be better than incurring an extra year of transitional project cost. On the other hand, it means that the UK will bear the cost and risk of piloting the new regime to the benefit of the rest of Europe.”

On Sunday, the FT reported that introduction of the new rules could be delayed by 12 months to allow more time for a smooth transation. The newspaper reported that “concerns over the preparedness of some countries and regulators, as well as of parts of the industry itself, mean that they are not now expected to be properly introduced until the start of 2014” according to sources familiar with the process”.