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 its transposition and application and the date of repeal of certain Directives
Date: 2012-05-16
Institutions: European Commission
Subjects: financial solvency, freedom to provide services, insurance company, national implementing measure, reinsurance, right of establishment

EUROPEAN COMMISSION 

Brussels, 16.5.2012  
COM(2012) 217 final 

2012/0110 (COD) 

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 its transposition and 
application and the date of repeal of certain Directives 

(Text with EEA relevance) 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

Grounds for and objectives of the proposal 

Directive  2009/138/EC  (Solvency  II)  provides  a  modern,  risk-based  system  for  the 
regulation  and  supervision  of  European  insurance  and  reinsurance  undertakings. 
These new rules are essential in order to ensure a safe and solid insurance sector that 
can  provide  sustainable  insurance  products  and  support  the  real  economy  through 
long-term investments and additional stability. 

The  deadline  for  transposition  of  Directive  2009/138/EC  is  31  October  2012.  The 
existing  insurance  and  reinsurance  directives  (Directives  64/225/EEC,  73/239/EEC, 
73/240/EEC,  76/580/EEC,  78/473/EEC,  84/641/EEC,  87/344/EEC,  88/357/EEC, 
92/49/EEC, 98/78/EC, 2001/17/EC, 2002/83/EC and 2005/68/EC, as amended by the 
acts listed in Part A of Annex VI) that are collectively referred to as Solvency I will 
be repealed with effect from 1 November 2012. 

On  19  January  2011  the  Commission  adopted  a  proposal  to  amend  Directive 
2009/138/EC  in  order  to  take  into  account  the  new  supervisory  architecture  for 
insurance  and  namely  the  setting-up  of  the  European  Insurance  and  Occupational 
Pensions  Authority  (EIOPA)  on  1  January  2011  (COM  (2011)  8,  COD 
2011/0006)(Omnibus  II).  The  proposal  also  included  provisions  to  extend  the 
transposition, repeal and application dates in Directive 2009/138/EC. These rules are 
essential in order to ensure a smooth transition to the new regime. In addition and in 
order  to  become  fully  operational,  the  Solvency  II-regime  also  requires  a  high 
number of delegated and implementing acts by the Commission, providing important 
details  on  different  technical  matters.  Many  of  these  so-called  "level  2"-rules  are 
closely  linked  to  the  Omnibus  II-Directive  and  cannot  be  presented  by  the 
Commission before the publication of Omnibus II.  

At the current stage, there is a risk that the proposed Omnibus II Directive will not be 
published and will not have entered into force before the deadline for transposition of 
Directive  2009/138/EC  expires  at  31  October  2012.  Leaving  this  date  unchanged 
would  imply  that  the  Framework  Directive  would  need  to  be  implemented  without 
the  transitional  rules  and  other  important  adaptations  foreseen  in  Omnibus  II.  In 
order to avoid this situation and ensure the legal continuity of the current Solvency 
provisions  (Solvency  I)  until  the  complete  Solvency  II-package  is  in  place,  it  is 
proposed that the relevant transposition date in Directive 2009/138/EC is extended to 
30 June 2013. 

It  is  important  to  allow  supervisors  and  (re)insurance  undertakings  some  time  to 
prepare for the application of Solvency II. It is therefore proposed to set the date for 
first  application  of  Solvency  II  at  1  January  2014.  This  will  make  it  possible  to 
timely  start  the  supervisory  approval  procedures  e  g  for  internal  models  and 
undertaking specific parameters. 

The date of repeal of Solvency I should be amended accordingly. 

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In view of the above and given the very short period of time left before the time limit 
of  31  October  2012,  this  Directive  should  be  adopted  by  the  European  Parliament 
and the Council as a matter of urgency and enter into force without delay. 

This  Directive  is  necessary  in  order  to  prevent  a  legal  vacuum  to  arise  after  31 
October 2012. 

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). This would lead to 
legal uncertainty for supervisors, undertakings and Member States.  

1.2. 

Directive 2009/138/EC (Solvency II) 

This  Directive  establishes  a  new  and  modern  solvency  regime  for  insurers  and 
reinsurers  in  the  European  Union.  It  provides  for  an  economic  risk-based  approach 
which  provides  incentives  for  insurance  and  reinsurance  undertakings  to  properly 
measure and manage their risks. 

1.3. 

Proposal COM (2011) 8 (the Omnibus II Directive) 

This proposal aims to amend Directive 2009/138/EC in order to adapt Solvency II to 
the  new  supervisory  architecture  for  insurance  and  namely  the  setting-up  of  the 
European  Insurance  and  Occupational  Pensions  Authority  (EIOPA)  on  1  January 
2011  (COM  (2011)  8,  COD  2011/0006).  It  proposes  to  postpone  the  transposition 
deadline of Solvency II to 31 December 2012. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

2.1. 

Transmission of this proposal to the national parliaments 

Draft  legislative  acts,  including  proposals  from  the  Commission,  sent  to  the 
European Parliament and to the Council must be forwarded to national parliaments in 
accordance  with  the  Protocol  (No  1)  on  the  role  of  national  Parliaments  in  the 
European Union, annexed to the Treaties. 

According to Article 4 of the Protocol, an eight-week period must elapse between a 
draft legislative act being made available to national parliaments and the date when it 
is placed on a provisional agenda for the Council for its adoption or for adoption of a 
position under a legislative procedure. 

However, exceptions are possible under Article 4 in cases of urgency, the reasons for 
which  must  be  stated  in  the  act  or  position  of  the  Council.  The  adoption  of  this 
proposal by the European Parliament and the Council has to be considered as a case 
of absolute urgency for the reasons explained above. 

2.2. 

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  and  this 

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proposal only aims at avoiding a situation of legal vacuum to arise because of the late 
publication of Omnibus II in the Official Journal of the European Union. 

Doing  nothing  at  this  stage  would  create  a  very  uncertain  legal  situation  after  31 
October 2012. 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).  This 
would lead to legal uncertainty for supervisors, undertakings and Member States. 

Furthermore  the  Framework  Directive  would  need  to  be  implemented  without  the 
transitional rules and other important adaptations foreseen in Omnibus II. 

The proposed amendment affects only the obligation on Member States to transpose 
the  Directive  by  31  October  2012,  extending  it  to  30  June  2013.  It  also  foresees  a 
date  of  first  application  of  1  January  2014.  It  does  not  alter  the  substance  of  the 
Directive  in  question  and  does  not  therefore  impose  any  additional  obligations  on 
businesses. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Summary of the proposed measures 

The  proposal  amends  Article  309(1)  of  Directive  2009/138/EC  by  postponing  the 
date of transposition to 30 June 2013 and setting-up a later date for its application (1 
January 2014). It also amends Articles 310 and 311 accordingly by setting-up a new 
date for the repeal of Solvency I (1 January 2014). 

3.2. 

Legal basis 

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

3.3. 

Subsidiarity principle 

The subsidiarity principle applies as the proposal concerns a field which does not fall 
within the exclusive competence of the European Union. 

The objectives of the proposal cannot be achieved sufficiently by the Member States, 
as the provisions of directives cannot be amended or repealed at national level. 

The objectives of the proposal can be achieved only by EU action, as this proposal 
amends an act of EU law which is in force, and this is something which cannot be 
done by the Member States themselves. 

The  principle  of  subsidiarity  is  complied  with  in  that  the  proposal  amends  existing 
EU legislation. 

3.4. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reason. 

It  does  not  alter  the  substance  of  the  current  EU  legislation:  it  is  restricted  to 
postponing  the  date  for  the  transposition  of  Directive  2009/138/EC  until  30  June 
2013; in order to avoid a situation of legal uncertainty after the current deadline for 

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transposition  (31  October  2012)  has  expired.  It  also  provides  for  a  new,  later 
application  date  for  Solvency  II  and  consequent  repeal  of  Solvency  I  (1  January 
2014). 

3.5. 

Choice of instruments 

Proposed instrument(s): directive. 

No other instrument would have been suitable. As this is an amended directive, the 
only way forward is to adopt another directive. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the EU budget. 

5. 

OPTIONAL ELEMENTS 

• 

Simplification 

The new proposal as such contains no simplification elements. It is aimed solely at 
postponing the date for transposition of Directive 2009/138/EC to 30 June 2013 and 
providing for a new application date of 1 January 2014. 

• 

Repeal of existing legislation 

The adoption of the proposal will not in itself entail the repeal of existing legislation; 
it merely adjusts the date of the repeal already foreseen in Directive 2009/138/EC. 

• 

European Economic Area 

This draft instrument is concerned with a subject covered by the EEA Agreement and 
must therefore be extended to cover the European Economic Area. 

• 

Detailed explanation of the proposal by chapter or by article 

This  proposal  postpones  the  date  of  transposition  of  Directive  2009/138/EC  to  30 
June 2013. 

Article  1  of  the  proposal  amends  Article  309(1)  ‘Transposition’  of  Directive 
2009/138/EC  accordingly.  It  also  provides  for  a  new,  later  date  of  application  of 
Solvency II (1 January 2014). 

Article 2 amends the date of repeal of Solvency I (from 1 January 2014) in Article 
310  and  provides  for  the  same  date  as  date  of  application  of  the  provisions  of 
Solvency I re-casted by Solvency II in Article 311. 

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2012/0110 (COD) 

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 its transposition and 
application and the date of repeal of certain Directives 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 53(1) and Article 62 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee1, 

Having regard to the opinion of the Committee of the Regions2, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

Directive  2009/138/EC  of  the  European  Parliament  and  of  the  Council  of  25 
November  2009  on  the  taking  up  and  pursuit  of  the  business  of  Insurance  and 
Reinsurance  (Solvency  II)3  provides  a  modern,  risk-based  system  for  the  regulation 
and supervision of European insurance and reinsurance undertakings. These new rules 
are  essential  in  order  to  ensure  a  safe  and  solid  insurance  sector  that  can  provide 
sustainable  insurance  products  and  support  the  real  economy  through  long-term 
investments and additional stability. 

(2) 

Directive  2009/138/EC  sets  31  October  2012  as  the  the  date  for  transposition  and  1 
November  2012  as  the  date  of  repeal  of  .  the  existing  insurance  and  reinsurance 
Directives  (Directives  64/225/EEC4,  73/239/EEC5,  73/240/EEC6,  76/580/EEC7, 

1 
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7 

OJ C , , p. . 
OJ C , , p. . 
OJ, L 335, 17.12.2009, p.1. 
OJ, 56, 4.4.1964, p. 878. 
OJ, L 228, 16.8.1973, p.3. 
OJ, L 228, 16.8.1973, p. 20. 
OJ, L 189, 13.7.1976, p. 13. 

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(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

78/473/EEC8,  84/641/EEC9,  87/344/EEC10,  88/357/EEC11,  92/49/EEC12,  98/78/EC13, 
2001/17/EC14, 2002/83/EC15 and 2005/68/EC16. 

On  19  January  2011  the  Commission  adopted  a  proposal  to  amend  Directive 
2009/138/EC17  in  order  to  take  into  account  the  new  supervisory  architecture  for 
insurance  and  namely  the  setting-up  of  the  European  Insurance  and  Occupational 
Pensions Authority (EIOPA). (Omnibus II). That proposal also included provisions to 
extend 
in  Directive 
transposition,  repeal  and  application  dates  set  out 
2009/138/EC. 

the 

Given the complexity of the "Omnibus II" proposal, there is a risk that it will not have 
entered into force before the relevant dates set out in Directive 2009/138/EC. Leaving 
those  dates  unchanged  would  result  in  Directive  2009/138/EC  to  be  implemented 
without the important adaptations provided in "Omnibus II" being put in place.  

In order to avoid overly burdensome legislative obligations for Member States under 
Directive  2009/138/EC  and  later  on  under  the  new  architecture  envisaged  by  the 
"Omnibus  II"  proposal,  it  is  appropriate  to  extend  the  transposition  deadline  for 
Directive 2009/138/EC.  

In  order  to  allow  for  supervisors  and  insurance  and  reinsurance  undertakings  to 
prepare  for  the  application  of  the  new  architecture  as  a  whole,  a  later  date  of 
application, namely 1 January 2014, should be foreseen.  

In order to avoid a legal vacuum, the date of repeal of the existing insurance Directives 
should therefore be aligned accordingly. 

Given the very short period of time left before the expiry of the deadlines laid down in 
Directive 2009/138/EC, this Directive should enter into force without delay. 

Consequently, it is also justified to apply the exception for urgent cases provided for in 
Article 4 of Protocol (No 1) on the role of national Parliaments in the European Union 
in this case as regards the transmission to national Parliaments of the proposal for this 
Directive,  

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 2009/138/EC is amended as follows: 

1. 

Article 309(1) is amended as follows: 

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13 
14 
15 
16 
17 

OJ, L 151, 7.6.1978, p.25. 
OJ, L339, 27.12.1984, p. 21. 
OJ, L 185, 4.7.1987, p. 77. 
OJ, L 172, 4.7.1988, p. 1. 
OJ, L 228, 11.8.1992, p. 1. 
OJ, L 330, 5.12.1998, p. 1. 
OJ, L 110, 20.4.2001, p. 28. 
OJ, L 345, 19.12.2002, p. 1. 
OJ L 323, 9.12.2005, p. 1. 
(COM (2011) 8, COD 2011/0006) 

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(a) 

in the first subparagraph, the date "31 October 2012" is replaced by "30 June 
2013"; 

(b) 

the following second subparagraph is inserted: 

"Member  States  shall  apply  the  laws,  regulations  and  administrative  provisions 
referred to in the first subparagraph from 1 January 2014." 

2. 

3. 

In Article 310, the date "1 November 2012" is replaced by "1 January 2014". 

In Article 311, the date "1 November 2012" is replaced by "1 January 2014". 

This Directive shall enter into force on the day of its publication in the Official Journal of the 
European Union. 

Article 2 

Article 3 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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