Omnibus II passed by European Parliament

Michel Barnier

The final obstacle to Solvency II implementation looks to have been passed after the European Parliament adopted the Omnibus II Directive today.

Michel Barnier, European Commissioner for internal market and services, said the European Parliament had taken "a very important step towards the introduction of a modern and risk-based solvency regime for the insurance industry in Europe as of 1 January 2016, making it both safer and more competitive".

Omnibus I incorporated references to the European Supervisory Authorities into banking and securities directives and activated their powers as granted in their founding directives. Omnibus II does the same for the insurance sector, activating the powers of the European Insurance and Occupational Pensions Authority via changes to the Solvency II Directive.

The draft directive also contained a set of amendments to the Solvency II Directive and to the Prospectus Directive. In particular, it clarifies the role of EIOPA in ensuring harmonised technical approaches for the calculation of technical provisions and capital requirements.


In addition, The Omnibus II Directive contains a package of measures to provide clarity on the treatment of insurance products with long-term guarantees in order to mitigate the effects of artificial volatility.

These measures include a matching adjustment, a volatility adjustment, extrapolation of the risk-free interest rate, two specific transitional measures, and extension of the recovery period. In this way the Directive ensures that the insurance industry can continue offering long term guaranteed products.

The Omnibus II Directive also contains transitional measures in certain areas including on transitional third-country equivalence if deemed necessary to avoid market disruption and to allow a smooth transition to the new regime under Solvency II.

The Solvency II Directive (including the amendments introduced by Omnibus II) will apply as of 1 January 2016, in line with the Commission proposal of 2 October 2013 postponing the application date of Solvency II.

After today's adoption by the European Parliament, the directive will need to be formally adopted by the Council and be published in the Official Journal. It will enter into force the day after publication.

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