European Parliament approves Solvency II revision proposal

After more than a year of negotiations, the European Parliament's Committee on Economic and Financial Affairs (EP) today approved the proposed amendments to the Solvency II Directive: 55 votes in favour, three against. It was exciting until the last minute whether rapporteur Markus Ferber would succeed in gaining sufficient support for his proposals from other political parties.

In recent weeks, several meetings have taken place between Ferber and representatives of the various political parties that lasted until late in the evening to reach a compromise. Today, the Christian Democrats, Social Democrats, Liberals, Conservatives and Greens all voted in favour of Ferber's draft report.

Vote on proposed solvency II directive amendment

Important next step

The vote marks an important new step in the Solvency II review process that started in 2019. A plenary vote on the final report with the full-language EP will take place in September. Ferber will then start negotiations on behalf of Parliament with the currently Spanish President of the Council of Finance Ministers on a final agreement.

Date of entry into force still uncertain

Ferber and the Council are expected to reach an agreement by the end of this year or early next year. After that, the revised Solvency II regulations are expected to enter into force on 30 June 2025. Although this date is not yet certain because the duration of the implementation period is part of the negotiations.

Resumption of review process

The Dutch Association of Insurers is pleased that after a long period with few developments, the review process is now gaining momentum again. In terms of content, the proposals on capital requirements for products with long-term guarantees have been improved compared to the European Commission's previous proposal. Ferber's proposals also contain good improvements in terms of proportionality for insurers with a low risk profile. The Covenant therefore hopes that Ferber, with the broad support for his texts, will be able to keep the momentum in the further process in the coming months. The final report will soon be discussed in the Solvency Working Group of the Dutch Association.

Also agreement on IRRD

The same meeting also voted on the European harmonisation of the framework for the recovery and resolution of insurance and reinsurance undertakings (IRRD). This proposal was also adopted.