NU Online News Service, June 27, 2:58 p.m. EDT
The vast majority of insurers feel Solvency II implementation should be delayed a year as Europe's underwriters express doubt that regulators are ready to implement the new rules, according to a survey.
In a survey conducted by Aon Benfield during its International Analytics conference in May, 60 percent of the 100 reinsurance managers and senior analytics experts say it would be better if the starting date for Solvency II were delayed a year to 2014.
Only 31 percent felt the date should not be delayed and are working toward the Jan. 1, 2013 implementation date.
A tiny minority, 9 percent, thought "maybe" the date of implementation should be delayed.
Solvency II is the European Union's new financial regulation that stresses risk-based capitalization and could lead to insurers having to increase their capital position.
Aon Benfield points out that implementation of Solvency II could be delayed as modifications to the rules, titled Omnibus II, have not passed into legislation in European Union nations. Until that is done, the European Commission cannot adopt implementation measures and guidance.
"All of these components have to be passed into legislation following the required consultation periods, ahead of Solvency II's inception," Aon Benfield notes.
The survey found that insurers are also concerned with the level of understanding their local regulator has of the insurance business.
The majority—61 percent—of European insurers say their regulator is not up to speed with internal models, while 54 percent feel their regulator is not up to speed with underwriting risks, in particular catastrophe risks.
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