Europe’s vast insurance sector has welcomed last night’s agreement between EU institutions on the Omnibus II Directive – part of the new Solvency II regime – even though it said the result “was not the ideal solution”.

With so little time left to finish the many details of the new rules, it was important the agreement had been reached now, said Insurance Europe, the European insurance and reinsurance federation.

Sergio Balbinot, president of the industry body, said: “Insurance Europe commends the EU institutions for reaching agreement on Omnibus II.

“It was important for Omnibus II – which updates the Solvency II Directive of 2009 – to be finalised now, as a great deal of work remains to be done on the technical details of the new regime before insurers and supervisors can be ready to apply it from the start of 2016.”

The Omnibus II Directive effectively updates the EU’s Solvency II framework directive agreed in 2009, to reflect changes such as those in the Lisbon Treaty.

It also deals with concerns about artificial volatility and pro-cyclicality created by the Solvency II measures when they were tested in the fifth quantitative impact study (QIS 5) in 2010, Insurance Europe said.

The lobby group said the agreement was an important milestone on the way towards the new Solvency II risk-based regulatory regime for insurers in the EU.

Looking ahead to future stages of the Omnibus II process, there will be very little time between the finalisation of the delegated acts and technical standards, and the proposed application date of 1 January 2016, Insurance Europe said.

Despite this, the federation said Europe’s insurers would do all they could to meet the ambitious timetable.

“While the compromise reached between the institutions on Omnibus II is not the ideal solution the insurance industry would have wished for in terms of correctly reflecting insurers’ long-term business and low exposure to market volatility, it is a workable base from which to develop the technical details of the new regulatory regime,” Balbinot said.

He said Solvency II would increase confidence in the European insurance industry, the largest in the world, accounting for one-third of global premiums