After a week of incredibly varied weather, last week saw the sun set on the ABI’s 2013 Solvency II Conference at the Grange Tower Bridge Hotel in London.
Ray of light
So, what might the regulatory weathermen predict? On the one hand, the future looks bright. Assembled conference-goers were told by leading politicians and policymakers that an agreement on the Omnibus II Directive is fast approaching in the horizon, and looks set to blow away some of the clouds of uncertainty that have thus far hampered insurers’ implementation plans. We also heard Sajid Javid MP – the newly-appointed Financial Secretary to the Treasury – reaffirm the UK Government’s commitment to finding a workable solution that will allow the industry to continue to provide useful products for consumers and to aid economic growth by being able to invest over the long-term.
Obscured by clouds
On the other hand, there may be storm clouds on the horizon because there is still a lot of work to be done in the build-up to full implementation. Justin Wray of the European Insurance and Occupational Pensions Authority spoke about the interim guidelines that will impact on firms and regulators over the next couple of years, with reporting obligations at the forefront of the minds of many insurers. A torrent of information will need to be produced by insurers under the new rules and is going to require large amounts of planning and resource.
The implementation challenge is significant but not insurmountable. Whilst the industry must start preparing now, this effort needs to be met with a sensible and proportionate approach from national supervisors such as the Prudential Regulation Authority. Constructive dialogue between the regulators and the regulated will be essential in determining the success of a transition from the current regime to Solvency II.
Sunshine after the rain?
There is, of course, the greater uncertainty of the longer-term forecast; thick fog surrounds the work being done by the International Association of Insurance Supervisors on a common framework for insurance supervision and a global capital standard is still a developing system.
For the moment, however, the Solvency II clouds appear to be thinning, and when the industry ventures outside in a little over two years, it will need to be dressed for the weather.
Check out the social media highlights of the Solvency II Conference on Storify.