The European Union has agreed the final measures of the Solvency II framework and given a January 2016 start date.
In talks on Wednesday evening, negotiators from the European Parliament , EU Commission and the Lithuanian Council agreed on a deal on the Omnibus II Directive governing elements, including the handling of long-term insurance liabilities.
According to official rapporteur Burhard Balz, the terms agreed mean "comprehensive rules will remain manageable even for small and medium-sized insurers".
There will be "exceptions for small businesses to ensure that the reporting burden is not out of hand", including "exceptions include reporting during the year and the asset -by -asset reporting", he added.
"The risk-based capital requirements to ensure in insurance with the newly agreed improvements Solvency II can start at last," Balz added.
Deloitte, the business advisory firm, says the decision will provide insurers with much-needed clarity.
Rick Lester, lead Solvency II partner at Deloitte, said: "Agreement at the meeting between the European Parliament, European Committee and European Council paves the way for implementation of Solvency II from 1 January 2016 and provides insurers with much-needed clarity on timelines.
"Some insurers have slowed down their Solvency II preparations pending this clarification. This agreement will now be a catalyst for them to speed up their implementation plans.
"UK insurers have generally made good progress towards meeting Solvency II requirements, particularly in relation to the modelling and system of governance, but more work is needed to comply with reporting requirements."
Jeremy Irving, partner and insurance expert at global law firm Eversheds, commented: "It remains to be seen whether Solvency II will have only those positive benefits for which its promulgators hoped.
"It is possible that it will have some consequences which are potentially adverse for European insureds, intermediaries and even insurers, especially with the forces at play in the global digital economy.
"However, for the time being at least, there is greater clarity on the process moving forward."
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