PRA briefing on Solvency II, IMAP and application of EIOPA's preparatory guidance

Santa's 'Omnibus 3' joke was not so

well received... 

Santa obviously couldn't wait to put a smile on the faces of the insurance industry this year, so his little helpers at the PRA delivered an industry briefing yesterday, and subsequently released a bucketload of materials which aimed to help give everyone's still-defrosting Solvency II programmes an early steer as to expectations over the next two years.

The main document released was a supervisory statement (along with a video explaining what a 'supervisory statement is!), which followed on from a recent consultation on how the PRA plan to apply EIOPA's preparatory guidelines.

That blog post is effectively still relevant, as virtually nothing changed as a result of the consultation which, at 18 responses, was appallingly participated in, and is perhaps symptomatic of the malaise with which the topic has been infected by during 2013.

The three areas where the PRA have provided specific clarifications following the consultation were;

• Sys Gov Guideline 30 (Securitised Instruments) - note that they will tell EIOPA that it is badly drafted, but that ultimately firms should focus on intended outcomes of it if in doubt 
• Sys Gov Guideline 41 (Actuarial Function) - confirm that the function will need to provide opinions on the reinsurance arrangements and underwriting policies during transition
• Reporting - Confirm that submissions in XBRL are expected by June 2015, but give some wriggle room should EIOPA not fix the templates!

Other than that, it is "as you were".

Julian Adams took time off from his new YouTube career to speak at the event as well - the speech, lovingly titled "A Turning Point", has been published, and from a UK Solvency II Programme perspective. I took the following from it;

General Solvency II

• "Certainty" on timetable, so while he appreciates that firms "downsized their Solvency II programmes", "...now is the time to reassess priorities" - so go tell your CFOs you need another cheque!
• "Expects to have discussions with firms" on the effect of the agreed matching adjustment on capital and technical provisions.
• On the 16-year transition to full Solvency II technical provisions, they are pleased "...to have the safeguard of the transitional floor" which will keep the old regime relevant for years to come
• The Commission "...hope to have a stable version [of delegated acts] ready by March", though won't be publishing them until summer. Does that mean we'll get another leak, like in October 2011?
• "...it is important that firms stay appraised of developments in delegated acts, implementing technical standards and guidance to be issued by the Commission and EIOPA" - PRA seemingly distancing themselves as an influencer at this point, and positioning itself as an administrator
• To that end, the PRA Handbook will follow "intelligent copy-out" rules, so the only elaboration we should expect in future outside of materials produced in the low countries will be in the form of Supervisory Statements (see above!)
• Some technical actuarial papers will be released by the PRA in the New Year 
• Reminder for standard formula firms that they will need to make sure their SCR calculation is suitable, including consideration of USPs/PIM

Specific to the PRA's application of EIOPA Preparatory Guidance

• "...emphasis is on preparations for Solvency II and not its early implementation"
• "We are not gold plating any of the guidelines" - no definition of what "gold plating" means though, which would have been useful.
• "[Proportionality] does not mean that firms can select which requirements to comply with or not"
• Expect incremental improvement in the quality of ORSA Supervisory Reports submitted between 2014 and 2015
• Industry Working Group on Reporting has been set up, as there is evidently enough discord within the UK at the prospect of parallel running numbers to justify a PRA/Industry jam session. That said, July 2015 remains the PRA expectation for XBRL reporting to come in from firms within the thresholds
• For IMAP, "it is critical that firms keep to their allocated submission slot" - if you miss, you "...will join the end of the queue", which might help free up some purse strings!
• "...no longer possible" to offer any flexibility to firms in the IMAP space. 

The PRA Consultation on EIOPA's Preparatory Guidance - priorities for 2014 and 2015

After 10 years, it's finally getting interesting - the PRA today have dropped out a consultation paper on applying EIOPA's preparatory guidelines to PRA-authorised firms (CP 9/13). You can get at the EIOPA materials through this post for convenience.

The content will, subject to any intense lobbying by industry, be adopted as a supervisory statement (section 233) to cover the 2014 and 2015 calendar years, with the expectation remaining that 2016 is our "go-live" date. It covers the following aspects of the preparatory phase;

• The PRA's expectations of firms as they prepare for Solvency II;
• The PRA's approach to implementing the guidelines; and
• The PRA's interpretation of aspects of the guidelines.

They are at pains to highlight that these are "preparatory" guidelines, and provide the traditional spiel on "nature, scale and complexity", so incremental progress is to be expected during the period in question. What that means in practice is perhaps another thing - can you show measurable 'incremental progress' for materials which are only on an annual review cycle, for example? - but that aside, it's worth picking the bones out for your respective programmes, and perhaps most importantly, getting your feedback in by November 15th if you don't like it!

Perhaps the most noteworthy aspect of this CP is that in no way is it suggestive of the PRA rejecting any of EIOPA's guidance (remember, they have until the end of November to voice any protest). That of course makes preparatory work much easier to plan for, as the UK will seemingly be doing it all!

My thoughts on the specifics were as follows;

System of Governance (SOG)

• Emphasise that the SFCR requirements around SOG are also catered for in EIOPA's work (3.7), so a smart move would be to factor that into your drafting plans during 2014
• General governance requirements "largely consistent with SYSC", though individuals holding key functions might expect a personal visit in the next two years (3.10)
• Similar position for Risk Management Systems (3.12), stressing the commonality of requirements with existing PRA obligations, but stressing in particular that firms should be "...including suitable mechanisms and methodology for connecting to their ORSAs and for carrying out regular stress and scenario tests" during the preparatory phase.
• That Prudent Person Principle is not a new concept to the PRA, but firms would be expected to review investment strategies in line with PPP over the next couple of years. A concession is seemingly made regarding the provision and review of third-party data by investment functions for smaller firms. 
• On the (new) requirement for a Capital Management Policy/Medium Term Capital Plan (3.16), they are not moving, despite the howls of protestation - "The PRA regards the development and implementation of such policies and plans as an integral part of sound risk and capital management for all firms, especially as their management and Boards assess the implications of the forthcoming Solvency II own funds and capital requirements"
• On internal controls, they appear to be fishing for firms to analyse whether their existing framework is Solvency-II ready, and then piggy-back of that self-assessment (3.17)
• Same for Internal Audit function readiness! (3.18)
• Actuarial function get a more bespoke treatment (3.19), with all firms asked to "carefully consider" the functional structure to avoid conflicts of interest. They also reserve the right to "...review firms’ analysis of the areas required for improvement, and understand the actions the firm is taking to resolve these".
• Outsourcing similarly gets additional treatment by the PRA (3.22), who are "particularly interested" in changes made specifically with Solvency II readiness in mind

Useful quotes

...the PRA articulates its expectations of firms in the preparatory period, including that firms should read, assess and implement the substantive provisions of the guidelines in order to achieve the intended outcomes (2.5)

The guidelines and this statement are designed to work towards a consistent and convergent approach in preparations for Solvency II and not its early implementation (2.6)

 The PRA expects firms, when asked, to be able to explain what governance changes they need to make to satisfy the guidelines, how they plan to make those changes, what progress there has been to date and any particular difficulties they face (3.4)

The PRA expects firms to be able to document their overall approach to outsourcing, including contingency plans in the event of a service provider failure, to ensure that the efficiency of the service remains unimpaired and uninterrupted. (3.22)

During the preparatory period, the work of the actuarial function will now focus on co-ordinating the calculation of technical provisions, providing an opinion on the underwriting policy and reinsurance arrangements and contributing to the development and performance of the internal model in the pre-application stage where relevant (3.19)

During the preparatory period, the PRA encourages firms to consider how to manage the transition to the new regime and to assess the impact on existing asset portfolios of Solvency II requirements. This need not necessarily mean that changes have to be made to firms’ investment strategies or portfolios but firms are encouraged to work on an incremental basis towards demonstrating that they meet the requirements of the PPP (3.14)

During the preparatory period firms should review their existing policy for assessing fitness and propriety and whether it needs updating in advance of Solvency II (3.11)

FLAOR/ORSA

• PRA only planning to review assessments "...on a proportionate basis" during preparatory phase - they elaborate further by stating "Due to the high number of ORSAs which will be submitted, the PRA expects that it may have to stagger its review of these during the preparatory period in a way that is risk based and proportionate". Does that mean "Top Ten & Lloyds & IMAP" get the works, with everyone else getting a lite-touch?
• Expectation that improvements are identifiable between the 2014 and 2015 FLAORs - the PRA will contact firms individually if they are within the threshold limits which enact guidelines 14-16.
• On ORSA documentation, "...firms should recognise the need for effective documentation and record keeping", for both Policy and Report (4.7)
• Note that the Board's involvement in ORSA is "...far more extensive than setting risk appetites and tolerances", and leave an open threat to go through Board packs/agendas to ensure this is the case (4.8)
• Smaller firms get permission to use their internal ORSA Report as the ORSA Supervisory Report, provided it has enough detail. Larger/riskier firms may conversely be asked to supplement whatever they submit. (4.10)
• PRA actually considering issuing a "summary sheet" to firms in order to help gather information consistently (4.11). Here comes the ORSA Template!
• Expectation that 2014 projection work is done on existing basis, and 2015 (ideally) on Solvency II basis (4.15)

Useful quotes

The preparatory period is a time of development for firms in designing, compiling and trialling these assessments (4.3)

To help capture [ORSA] data and information in a consistent way from firms and facilitate review the PRA is considering whether it may be beneficial to provide a summary sheet to firms (4.11)

The PRA does not intend to prescribe when firms should submit their ORSA...Firms should inform the PRA when their ORSA will be submitted well in advance of the submission date (4.19)

The PRA expects the Board to play an active part at various stages, providing initial steering on how the ORSA should be designed and documented, challenging on risk identification and mitigation along the way and culminating in the Board approving and communicating the finished product. (4.8)

The PRA expects all firms to develop a qualitative process to develop an ORSA which can be documented and reviewed by the PRA in line with its overall proportionate approach.(4.6)

Submission of Information

• Confirms that XBRL is required prior to 2016 as submission format for QRTs (5.7)
• Suggest that policies and procedures around reporting in firms may need "potentially significant revision" in light of Solvency II. (5.15)
• Rather obscurely, they write, "The PRA does not expect that preparatory reporting will be subject to a requirement for external audit but it may draw upon audited inputs" - as I recall the participation of external auditors in QRT-type reporting has been a massive bone of contention in Brussels (indicated within these IRSG comments from last year, but I'm sure there's a more recent story), but potentially not a welcome development.

Internal Model Pre-Application

• They isolate the Model Change policy as an example of something which should already be tested for its appropriateness (6.5)
• Still expect firms to come forward and brief them on "significant" changes during pre-application.
• Surprisingly, very little else,

Useful quotes

...it is important that where models are sufficiently stable, firms are beginning to demonstrate their use and continue to refine their models with the benefits of experience (6.5)

I may fire some feedback in, but ultimately I suspect this lady is not for changing...

Solvency II compliance ahead of "Go-Live" date - over to you, regulators

Judging by the rather resigned tones around the achievability of Solvency II "go-live" by 2014 (CBoI recently joining the FSA) and 2015 (here and here), there appears to be a growing swell of support for implementing some of the less wobbly bits sooner rather than later.

While it's unlikely that there will be more spurious adoptions than a Madonna safari trip, it is interesting to see what we can point at to-date;

UK - ICA+ regime, which lends itself, subject to the quality of the ICA-to-SCR reconciliation, to implementation from as early as year-end 2013, though one suspects 2014 is a safer bet.

Germany - Cheeky bit of Pillar II, judging by Bafin's (indirectly quoted) comments on Reuters today, although what "some risk controls" actually means is another thing!

Ireland - via the sterling work on PRISM, fitness and probity and corporate governance, it's hard to argue where they are not already Pillar II Solvency II-equivalent (at least in word, if not in deed!)

France - reference to compulsory submissions to the ACP in XBRL by Q1 2014 at the bottom of this doc, apparently confirmed at a recent soiree.

So we could very well have 3 Pillar coverage by 2014, just randomly spread out over multiple countries...

Any more for any more?

Ernst and Young European Solvency II survey - the storm before the calm...

So Ernst and Young have decided to join the party with one of the more noble attempts to gather EU-wide industry opinion on progress towards Solvency II compliance, and kindly published those findings recently. Yes, I understand that this survey came out over a week ago, but I left my notes in the Isle of Man last Monday, and I'm not so enthusiastic that I fancied another turbo-prop into Ronaldsway Airport to 'go fetch'.

There was naturally plenty of media comment on its content (here, here and here for a start, but I'm sure you can do better), but bearing in mind it was released with a backdrop of 2015/2016 and the moveable feast that is UK IMAP, one could be forgiven for not caring less about the results that point to preparedness 'by 2014'. However, the E&Y guys obviously stayed up all night to do it, so I gave it the once-over and noted the following;

Sample - 160+ respondents from 19 countries, about as volumous as I have come across, though clearly weighted towards medium/large firms (€100m+ premium income per annum), and what we might call "old" Europe.

General

• 90% reckoned they could be compliant by 2015 (though E&Y say that is the date proposed by the EC, rather than to it)
• High level of confidence around Pillar 1 and Pillar 2 preparedness, though shockingly two-thirds of respondents did not use the draft L2 rules when producing their balance sheet, which makes you wonder what constitutes "ready" in some countries! 
• 80% not meeting Pillar 3 "requirements", with loose use of the expression "all requirements" for (as mentioned for Pillar 1, is this 'Level 1 plus draft Level 2', or 'Level 1 plus EIOPA advice'?). One of the worst affected areas is the development of a Disclosure Policy, which I find as understandable as I do sad.
• Almost 70% have only met some of the data quality requirements - I'm sure the national regulators, in particular the FSA, would wince at that, even factoring in an extension.
• Very interesting stat on the number of respondents developing Partial Internal Models (around half), with half of that number again looking for, what was at the time, "Day 1 approval". I wonder if the likely shift of "Day 1" to 2015 or 2016 allows these figures to flex, and if the national regulators are staffed to cope with it?
• "Range of capital optimisation strategies" will be applied by the majority of respondents in 2013 - curious to know why firms would not optimise their capital deployment as a matter of course!
• Larger organisations said to be tailing off expenditure during 2013 and have delivered compliance by mid-2014. Will an extension simply elongate existing expenditure plans or require fresh budget, and indeed how many times can one go 'back to the well' on this?
• ORSA is by some distance the biggest laggard in the Pillar 2 space, with only 30% "mostly" meeting requirements as they stand. Can only imagine the question was asked before EIOPA came back on the L3 public consultation in June, as EIOPA were pretty clear on what to do next.
• Some pretty flabby words on Data and IT readiness, but easy to get the general picture of "not very good" progress, particularly in the end-user computing space (three-quarters

E&Y angles

• Clearly lobbying for recalibrating long-duration debt (p5)
• Bit of scaremongering for smaller companies on their resource estimates (p6) - shake them down all you want, they just can't afford you!
• Strange bit of touting done around a lack of formal assessment around the effectiveness of one's Risk Management System (p12) - don't believe this is compulsory, only that your Risk Management System is effective.
• Also fishing hard for what was previously low hanging fruit around documentation, data governance and use test (p20).

Internal Model - specific

• Two thirds of French and half of German internal model applicants not fishing for "Day 1" approval - not sure if this is due to BAFIN and the ACP playing hardball (already seen an instance of a modeller fleeing Germany), but an extension to 2016 puts them back in the game for "Day 1" surely.
• Some expected discontent, though not in the majority, around the current SF risk calibrations (Op risk too low, underwriting and market too high). Even number found credit risk too high and too low, perhaps reflecting thought on long duration corporate debt and Eurozone government debt respectively.
• Nearly 80% of respondents expect the IM SCR to be at least 10% lower than SF SCR.

Worth adding as a footnote that 14% of UK respondents thought they'll be ready for implementation "in the course of 2012" - without Level 2 kiddies, are you sure!

FSA's Adams on Solvency II delay, IMAP and ICA - how long do you want lads?

It would appear that stabs in the dark on the Solvency II implementation date by senior insurance industry officials are like British buses - after the omerta-like silence of September, no fewer than three bigwigs have piped up in the last few days. First Sr. Bernadino decided to do his briefing via a Stateside publication, settling on 2016 as most probable, followed by Sr Montalvo who concurred (along with a great joke about his missus!).

While it didn't take a handsome Archaeology graduate to know that 2014 was ash, what the industry likes more than anything is cold, hard confirmation from their friendly national supervisor...

...which came today! Julian Adams gave a speech this morning ostensibly about the practical side of implementing the PRA's new approach after they get divorced from their FCA counterparts next year. Worth bulleting the big messages on IMAP;

• Current timetable "completely unrealistic" after Plenary postponement confirmed last week
• 2015 "...likely to prove very challenging"
• FSA will agree a revised landing slot with IMAP participants (presumably just those who have yet to submit?), UP TO A MAXIMUM OF END DECEMBER 2015.
• Will change this to match up with what comes out of Brussels if the two are divergent
• For ICAS, "we will have to live with the current regime for longer than any of us expected"
• The previously stated "aspiration" of potentially replacing ICA with internal model SCR will be formalised into a two step process. First, reconcile ICA with IM SCR (the easy bit!), then once the FSA are sufficiently happy, just produce IM SCR.
• Retain discretion to apply ICG throughout the interim period
• Benefits of this approach will therefore include much meatier pre-application evidence of use.

Hard to know where to go with this. Great news for anyone who remains on target for their original landing slots, as there is potentially some early-adopter capital benefits if they can abandon ICA. That said, the recent E&Y industry survey (which I will look at separately) suggested the Brits are mostly in a good spot for IMAP, so does extending the window negatively impact on the work already delivered? Certainly opens up a rather pricey Pandora's box around Validation activity which I'm sure many firms would have been delighted to have paid for one-time-only!

All in all, these public declarations will be welcomed by everyone who isn't writing a cheque for next year's IMAP activity...

Solvency II implementation delay - round up

"No news is good news" so goes the old motto, but in the case of this blog, "no news is new news"! After last week's sneaky peek at the options presented during trialogue discussions, the inevitable change of  EU Parliamentary Procedure file for Omnibus II was duly applied, and will now be discussed at the Plenary on March 28-31^st 2013 (honest).

That wouldn't have ruled out either of the options on the table of the Trialogue parties at the moment, but they might struggle to squeeze in an impact study on LTGs and publish the findings between now and March, particularly after it was made publicly clear by one regulator that EIOPA were not going to start that work as scheduled. The EIOPA lads did push out the tech specs for balance sheet valuation today though, which should at least get the frog out of the box.

 

It would have been a push to complete the study and leave enough digestion-time by March-end even without a late kick-off, so our friend Sr Bernadino has happily corroborated the "Big 4" speculators and faceless "sources" promoting 2016 as the new "go-live" date by giving his own counsel to the Wall Street Journal (cited in this non-paywall article). His preference for 2015 is qualified with the probability that 2016 will prevail.

 

While thumbing my nose at the Reuters article above, it does make the link between postponement and the Commission's desire to immediately spur longer-term investment in a stagnating, rioting, semi-employed Eurozone (which is much easier without Solvency II's heavy embrace, particularly the calibration of capital requirements for long duration debt instruments which the document referenced in this post covers all too well).

 

However, for DG Faull to effectively command a recalibration of that element now the going is a bit better makes you wonder how many more cherries we are going to pick - un deux trois, nous irons aux bois...

Omnibus II and the inevitable delay - why it's not so clear cut

Fantastic work over on the Solvency II Wire from Gideon on the meat and potatoes inside the eternally-baking Omnibus II pie, illustrating why the trialogue parties haven't just rolled over and declared 2015 as the new 2014.

While it would appear that the lobbying arms at Insurance Europe, AMICE, GCAE etc haven't piped up on industry preference yet, it looks like we have two deeply unpleasant alternatives to look forward to; hard launching a year late (i.e Omnibus II would only get signed off after the recently requested LTG consultation but 2015 would be the definitive "go-live"), or soft launching with 2 years parallel running (i.e. Omnibus II can go through before the LTG consult is finished, but with the sword of Damocles hanging over its contibution to the regulations until 2016).

My guess would be that there is little appetite in the firms for parallel running Solvency I/Solvency II to 2016 based on the administrative burdens this would currently place on the UK in particular through the current ICA process. A 'hard' 2015 and some more effective leadership in Brussels would be welcome relief to Solvency II Programmes from a planning perspective, though the knock-on effect on the model approval process and other scheduled supervisory work is yet to be seen.

Oddly, the EIOP-ians of the world pushed out the 2013 Work Programme this week which of course skips over any of the practicalities around such a delay - so having "already achieved a great deal" in Solvency II prep, they will "finalise the [53] standards and guidelines" currently required of them, set up an "internal model support expert unit", and "finalise the preparation of the [supervisory] Colleges" - and all of this while Rome burns!

It is a perverse situation when a subject as politically divisive as capital requirements for long term guarantees across the union is not as complex as trying to get three well-briefed parties around a table to agree on an implementation date. At a time when the Commission wants an inflation-busting funding rise (which Parliament have 'ole'd through) and EIOPA have grown in headcount and cost by 50% y-o-y, the alarming regularity with which national self-interest and horse-trading has derailed a project of such significance makes me long for the jingoistic certainty of the Corn Laws - I'm guessing that's not a good thing...

KPMG on Solvency II - Progress in an uncertain world?

Handy survey from KPMG pushed around today touching on technical practices of UK Life firms (35 responded to the survey, so a decent enough sample). Appreciating the irony of the title in the same week as the rumour mill on an extension of Solvency II go-live to 2015 went into overdrive, the content is still valid on the benchmarking front, so worth a comb through.

Of particular interest I noted;

• IMAP remains top priority for those in the application process, though KPMG highlight that firms are closely reviewing the advantages of the IM versus standard formula due to FSA fussiness, implementation costs snowballing and less-than-attractive results coming out of the model (i.e the fabled 20% reduction guess-timates are perhaps out of reach!). Some comfort there for anyone struggling with the same issues.
• Documentation second priority for IMAP and non-IMAP firms - concerning at this stage, bearing in mind the FSA will have had plenty of opportunity to feed back on the big ticket items. If the industry still doesn't have a handle on regulatory requirements (or it does, but is not meeting them!), then perhaps it's a good job there is an extra year in the offing! 87% of the IMAP respondents said IM documentation specifically is causing challenges.
• Pillar 3 also high on priority lists - might we expect that to slip back on the agenda with the extra year? Particularly around software solutions, which may have previously been the only way for some laggards to populate QRTs etc within the proposed timeframes, some may decide to do something a little more ad-hoc for 2013 rather than full dry-running. Two-thirds of respondents note that turnaround time is a concern, and unsurprisingly 'achieving sign off' is a concern of around half, with the tight timescales naturally impacting on the likelihood of getting an executive to confidently put pen to paper.
• Only a third of respondents have dry-run their ORSAs - feels instinctively light, with those yet to run spread across the next 5 quarters. Natural areas of concern are later highlighted in this area, with ability (or lack of) to project across the business planning period, and plugging the ORSA process into the BAU strategic decision making process troubling around half of respondents. Bearing in mind only a third of respondents have performed any on-to-one training (with group training/workshops seemingly the preferred route), they may find that one will facilitate the other!

Some other noteworthy points;

• Only 80% think Solvency II will "significantly" impact the wider business - struggle to see how it could not frankly, but appreciate their are non-IMAP firms in the mix here
• Disturbingly large number of IMAP candidates appear to be behind the curve on P&L Attribution and Validation - interesting to know on the latter whether that is in respect of their internal findings or the FSA's view.
• Two-thirds of IMAP candidates using external assistance for validation - wonder how long that gravy train stays on the tracks with a shift to 2015?
• 20% don't have TPs in their IM scope - is that a bit chancey at this stage? I thought the FSA view on scope was a bit more onerous than some applicants may wish for.
• Datawarehousing seemingly moving towards being the preferred route to meet Pillar 3 obligations where an existing solution has not already been implemented prior to Solvency II

Good intelligence for both IMAP and Non-IMAP firms, and should provide some programme managers with crumbs of comfort when they see what's eating their counterparts right now.

Omnibus II - delay to September long enough?

You know what it's like - no Omnibus delays for ages, and then three come along at once (boom boom)! From January to April, April to July, and now announced today, July to September, the basic logistics of bifurcation in 2013 are starting to look decidedly ropey, even if 2014 go-live is still achieveable at a push.

Frankly, once you factor in the complexity of the trialogue procedure and the rather savage nature of clashes to date in ECON, its probably best for this one to simmer over summer after a good three months of Council, Parliament and the Commission kicking it round.

PS The procedure file has definitively been changed to reflect the change to the September Plenary - lets hope the Parliament enjoy their summer holiday more than the guys picking up the project tabs!

Solvency II - Another year (or two) later?

As flagged by Reuters earlier, the German FT has cited an "industry insider" as having whispered that a move to 2015, or even 2016, is a possibility.

While the general chatter in the FT article covers some supportibng argument on the quant front, the legislative timetable argument is a lot more compelling. Bearing in mind that the ECON vote has moved, but the plenary vote currently remains unchanged, should any delays or differences of opinion hold up Omnibus II clearance above and beyond the summer recess, the knock on effects would perhaps support this (i.e. bifurcation or not, Jan 2014 would not be achievable).

As ever, I guess the parliamentary vote date is the one to look out for!

Late post script - Reuters ponied up with another article today which touches on the story but brings in Peter Skinner's explanation of the delay