The European Parliament has affirmed January 2014 for implementation of the Solvency II regime for insurers and reinsurers in the European Union (EU).

It has approved a directive to extend the previous October 31 date to give supervisors, insurers and reinsurers time to prepare, avoiding a legal vacuum after that date, when Solvency I would be in force in EU member states but the EU’s legal system would have Solvency II.

The directive says Solvency II “provides for an economic risk-based approach which provides incentives for insurance and reinsurance undertakings to properly measure and manage their risks”.

“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.”