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With the summer recess looming, the pressure is on to agree a final version of Omnibus II before the MEPs return to their constituencies during the week of July 16.
The fear is that if an agreement is not reached before the summer, the wider Solvency II implementation timetable could be disrupted, potentially requiring further transitional measures or another change in implementation date.
A further trilogue has been scheduled for July 12, and there will be some fevered, last-minute horse-trading in the run-up to that meeting, as the parties attempt to hammer out a compromise agreement that can be signed off in the trilogue. While there is some optimism that a deal will be done, it is not clear what the implications will be for controversial areas such as the package of measures for dealing with long-term guarantee products and the transitional provisions that will apply to Solvency II.
There has been much debate over the technical purity of some of the proposals, such as the matching adjustment and the counter-cyclical premium, but in recent months the arguments have become more pragmatic as the process has become more political during the trilogue phase. The UK, France and Germany have been strong voices during these discussions but each has its own particular demands, reflecting the needs of their respective insurance markets.
It has come to a stage where a deal has to be done and it is likely that the outcome will not please all parties. What is important now is that there is a workable package of measures for the insurance industry – even if it is not perfect – and that some certainty can finally be brought to Solvency II.
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