PURPOSE: to report the dates for the transposition and application of Directive 2009/138/EC on the taking up and pursuit of the business of Insurance and Reinsurance (‘Solvency II’) and their exercise, as well as the date of repeal of some Directives.

LEGISLATIVE ACT: Directive 2013/58/EU of the European Parliament and of the Council amending Directive 2009/138/EC (Solvency II) as regards the date for its transposition and the date of its application, and the date of repeal of certain Directives ( ‘ Solvency I ’ ).

CONTENT: Directive 2009/138/EC ( ‘ Solvency II ’ ) of the European Parliament and of the Council provides a modern, risk-based system for the regulation and supervision of insurance and reinsurance undertakings of the Union.

Directive 2012/23/EU amends Directive 2009/138/EC by postponing the date for transposition from 31 October 2012 to 30 June 2013, the date of application from 1 November 2012 to 1 January 2014 and the date of repeal of the existing insurance and reinsurance Directives (collectively referred to as ‘Solvency I’) from 1 November 2012 to 1 January 2014.

The Commission adopted a proposal (the ‘ Omnibus II proposal’) to amend, inter alia, the Directive ‘ Solvency II ’ following the setting-up of the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA) and to adapt it to the new rules introduced by the Treaty on the Functioning of the European Union in relation to the Commission’s delegated and implementing powers.

Given the complexity of the ‘Omnibus II proposal’, there is a risk that it will not have entered into force before the date for transposition and the date of application of Directive 2009/138/EC.

Meanwhile, in order to avoid legal uncertainty and to give the supervisory authorities and industry sufficient time to prepare for the application of the rules, this Directive delays the repeal of the Directive ‘ Solvency II ’ from 30 June 2013 to 31 March 2015 . It also provides a later date ( 1 January 2015 ) for the application of ‘ Solvency II ’ and a report as a result of the date of repeal of ‘ Solvency I ’ .

ENTRY INTO FORCE: 19/12/2013.

The European Parliament adopted by 589 votes to 10, against 8 abstentions, a legislative resolution on the proposal for a directive of the European Parliament and of the Council amending Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) as regards the dates of transposition and application and the date of repeal of certain Directives.

Parliament adopted its position at first reading, under the ordinary legislative procedure. The amendments adopted in plenary are the result of a compromise negotiated between the European Parliament and the Council.

According to the amended text, the date of transposition for Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) is postponed from 30 June 2013 to 31 March 2015 .

The Committee on Economic and Monetary Affairs adopted the report by Sharon BOWLES (ADLE, UK) on the proposal for a directive of the European Parliament and of the Council amending Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) as regards the dates of transposition and application and the date of repeal of certain Directives.

The committee recommended that the European Parliament adopt its position at first reading, taking over the Commission proposal.

PURPOSE: to postpone the dates of transposition and application of Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) and the date of repeal of certain Directives.

PROPOSED ACT: Directive of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: Directive 2009/138/EC (Solvency II) provides a modern, risk-based system for the regulation and supervision of European insurance and reinsurance undertakings.

On 19 January 2011, the Commission adopted a proposal to amend Directive 2009/138/EC ( Omnibus II ) in order to:

take into account the new supervisory architecture for insurance and namely the setting up of the European Insurance and Occupational Pensions Agency (EIOPA) on 1 January 2011; adapt Directive 2009/138/EC to the entry into force of the Lisbon Treaty which required the adjustment of empowerments for the Commission to adopt implementing measures to empowerments for the Commission to adopt implementing and delegated acts.

The deadline for transposition and application of Directive 2009/138/EC was initially 31 October 2012 and 1 November 2012 respectively, but pending the outcome of the on-going legislative negotiations on Omnibus II, Directive 2012/23/EU (Quick Fix) postponed these dates to 30 June 2013 and 1 January 2014 respectively.

In view of the fact that the negotiations on Omnibus II have not yet been finalised, the date of transposition of 30 June 2013, which has already elapsed, should be extended one last time. The aim is to avoid continued legal uncertainty and ensure the legal continuity of the current Solvency provisions (Solvency I) until the complete Solvency II package is in place.

IMPACT ASSESSMENT: this proposal is not accompanied by a separate Impact Assessment as an impact assessment for the Solvency II Directive has already been undertaken.

This proposal is necessary to avoid an uncertain legal situation after 1 January 2014. In the absence of this Directive, a gap would exist between the EU legal system (Solvency II) and that of Member States (where Solvency I as transposed would remain in force) leading to legal uncertainty for supervisory authorities, undertakings and Member States.

LEGAL BASIS: Articles 53 (1) and 62 of the Treaty on the Functioning of the European Union.

CONTENT: the proposed Directive does not alter the substance of the current EU legislation: it is restricted to postponing the date of transposition of Directive 2009/138/EC until 31 January 2015 ; in order to avoid continued legal uncertainty now that the current deadline for transposition (30 June 2013) has expired.

It also provides for a new, later application date for Solvency II and consequent repeal of Solvency I ( 1 January 2016 ).

BUDGETARY IMPLICATION: the proposal has no implication for the EU budget.