EU officials have confirmed that a draft of the level 2 regulations has been circulated to local regulators. Although this has not officially been circulated more widely, we understand that it is very similar to the October 2011 draft that was also not officially released but was so widely circulated that it had become generally available. It is the level 2 regulations that deal with the capital cost to insurers of their investments including real estate.  The October 2011 draft including a number of slightly anomolous positions, particularly in relation to the treatment of real estate lending.

We have been told that this new draft will not be subject to any further public consultation but will be considered by the EU Expert Group on Banking, Payments and Insurance:

http://ec.europa.eu/internal_market/finances/expert-group/index_en.htm

The timetable is very tight.  We have been told that a meeting of the Expert Group took place on 28 January 2014 and we understand that Member States had until February 12 to submit comments following which the Commission will make any changes to their draft text.  A second meeting will take place on March 26 and a final version will be sent to the translation services mid-April.  In the course of the Summer, the Commission hope to adopt the proposal and submit to co-legislators for approval.  A brief submission has been made to the person who leads on the Omnibus negotiations at attaché level in the UK Permanent Representation, but it is not clear that this will have any effect.

In view of the deficiencies in the earlier level 2 draft, it is disappointing that there will be no public consultation. It had previously been suggested that there would be a consultation between the passing of the Omnibus II Directive and the adoption of the level 2 regulations, and that this would specifically address the treatment of real estate lending by insurers.