Own risk and solvency assessment

EIOPA consults on the amendments of supervisory reporting and disclosure requirements

Retrieved on: 
Saturday, July 24, 2021
Capital requirement, European Insurance and Occupational Pensions Authority, European Union, Insurance regulation, Money, Solvency II, Business law, Own risk and solvency assessment

The European Insurance and Occupational Pensions Authority (EIOPA) published today a consultation on the amendments of supervisory reporting and disclosure requirements under Solvency II.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) published today a consultation on the amendments of supervisory reporting and disclosure requirements under Solvency II.
  • After a number of years of the implementation of Solvency II and the information received by national supervisory authorities it is important to ensure that the regular supervisory reporting remains fit for purpose.
  • In this consultation paper, EIOPA proposes amendments to the reporting requirements, which are mainly based on the Report on quantitative reporting templates published together with the 2020 Solvency II Opinion.
  • In addition to those changes, the proposals include simplification of quarterly reporting for all undertakings, elimination of some reporting templates for all undertakings and new thresholds to promote better risk-based and proportionate reporting requirements.

Supervisory statement on the ORSA in the context of COVID-19

Retrieved on: 
Tuesday, July 20, 2021
Capital requirement, Financial risk management, Own risk and solvency assessment, European Insurance and Occupational Pensions Authority, Contemporary history, Orsa, Insurance, Articles, COVID-19 pandemic

The European Insurance and Occupational Pensions Authority (EIOPA) published today the supervisory statement on Own Risk and Solvency Assessment (ORSA) in the context of COVID-19 pandemic.With the aim to foster supervisory convergence, EIOPA in this supervisory statement focuses on the supervision of the internal processes of undertakings that are necessary for having a good quality ORSA in place.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) published today the supervisory statement on Own Risk and Solvency Assessment (ORSA) in the context of COVID-19 pandemic.With the aim to foster supervisory convergence, EIOPA in this supervisory statement focuses on the supervision of the internal processes of undertakings that are necessary for having a good quality ORSA in place.
  • Given that COVID-19 pandemic has already its impact on undertakings,EIOPA expects that most of them have captured such a scenario in their ORSA by now.
  • For instance, some national supervisory authorities have also already issued guidance to reflect the pandemic situation in the ORSA.
  • The statement specifically addresses the pandemic situation, however the recommendations are applicable to any similar situation with the necessary adaptations.

Consultation on the revision of the Solvency II Guidelines on Contract Boundaries and Valuation of Technical Provisions

Retrieved on: 
Friday, July 16, 2021
Capital requirement, Insurance, European Insurance and Occupational Pensions Authority, European Union, Insurance regulation, Solvency II, Money, Actuarial science, Reinsurance, Own risk and solvency assessment

The European Insurance and Occupational Pensions Authority (EIOPA) launched two consultations today on the revision of the Solvency II Guidelines on contract boundaries and the valuation of technical provisions, in place since the implementation of Solvency II in 2016.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) launched two consultations today on the revision of the Solvency II Guidelines on contract boundaries and the valuation of technical provisions, in place since the implementation of Solvency II in 2016.
  • As part of the 2020 review of Solvency II, EIOPA identified several divergent practices regarding the implementation and supervision of calculation of technical provisions.
  • The Guidelines on contract boundaries promote a consistent application of an insurance or reinsurance contract boundary.
  • The Guidelines on valuation of technical provisions aim to increase consistency and convergence of professional practice for all types and sizes of undertakings across the EU Member States and to support undertakings in calculating their technical provisions under Solvency II.

Opinion on the use of risk mitigation techniques by insurance undertakings

Retrieved on: 
Tuesday, July 13, 2021
Actuarial science, Articles, Insurance, European Insurance and Occupational Pensions Authority, European Union, Insurance regulation, Risk, Reinsurance, Mitigation, Own risk and solvency assessment

The European Insurance and Occupational Pensions Authority (EIOPA) has published today an Opinion on the use of risk mitigation techniques by insurance undertakings.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) has published today an Opinion on the use of risk mitigation techniques by insurance undertakings.
  • The Opinion therefore addresses the use of risk mitigation techniques and includes a set of recommendations addressed to national competent authorities (NCAs) to ensure convergent supervision.
  • Risk mitigation techniques and, in particular reinsurance, are efficient tools for insurance and reinsurance undertakings to manage their risks according to their strategy and capacity.
  • The Opinion on the use of risk mitigation techniques by insurance undertakings is accompanied by animpact assessment and the feedback statement addressing the comments received during the public consultation.

Supervisory statement on supervisory practices and expectations in case of breach of the Solvency Capital Requirement

Retrieved on: 
Tuesday, July 13, 2021
Capital requirement, European Insurance and Occupational Pensions Authority, European Union, Insurance regulation, Insurance, Solvency II, Finance, Reinsurance, Money, Own risk and solvency assessment, Pan-European Pension

The European Insurance and Occupational Pensions Authority (EIOPA) published today the statement on supervisory practices and expectations in case of breach of the Solvency Capital Requirement (SCR).

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) published today the statement on supervisory practices and expectations in case of breach of the Solvency Capital Requirement (SCR).
  • With this supervisory statement EIOPA aims to foster supervisory convergence in the situations where insurance and reinsurance undertakings breach their capital requirement, in particular addressing the recovery plan required.
  • The supervisory practices in such situations need to be flexible and should consider the specific situation of the insurance or reinsurance undertaking.
  • Solvency II allows supervisory authorities to take early actions, therefore acting promptly to ensure supervisory convergence in this area is needed.

Monthly update of the symmetric adjustment of the equity capital charge for Solvency II – end June 2021

Retrieved on: 
Monday, July 5, 2021
Capital requirement, Money, Solvency II, European Insurance and Occupational Pensions Authority, European Union, Business law, Own risk and solvency assessment, Gabriel Bernardino

The European Insurance and Occupational Pensions Authority (EIOPA) has published the technical information on the symmetric adjustment of the equity capital charge for Solvency II with reference to the end of June 2021.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) has published the technical information on the symmetric adjustment of the equity capital charge for Solvency II with reference to the end of June 2021.
  • The symmetric adjustment is regulated mainly in Article 106 of Directive 2009/138/EC (Solvency II Directive); Article 172 of the of the Delegated Regulation of Solvency II as well as in EIOPA's Final report on ITS on the equity index for the symmetric adjustment of the equity capital charge: Read more

EIOPA publishes monthly technical information for Solvency II Relevant Risk Free Interest Rate Term Structures – end-June 2021

Retrieved on: 
Monday, July 5, 2021
Capital requirement, European Insurance and Occupational Pensions Authority, European Union, Insurance regulation, Solvency II, RFR, Risk, Technical documentation, Articles, Magazines, Business law, Own risk and solvency assessment

Background

Key Points: 
  • Background

    Technical information relating to risk-free interest rate (RFR) term structures is used for the calculation of the technical provisions for (re)insurance obligations.

  • In line with the Solvency II Directive, EIOPA publishes technical information relating to RFR term structures on a monthly basis via a dedicated section on EIOPA's Website also containing the release calendar for 2021, the RFR Technical Documentation, the RFR coding and Frequently Asked Questions.
  • With this publication, EIOPA ensures consistent calculation of technical provisions across Europe.

EIOPA continues to reinforce supervisory cooperation in cross-border activities

Retrieved on: 
Wednesday, June 30, 2021
European Insurance and Occupational Pensions Authority, European Union, Insurance regulation, Money, Government agencies, Pan-European Pension, Own risk and solvency assessment

The European Insurance and Occupational Pensions Authority (EIOPA) amended the Decision on the collaboration of the insurance supervisory authorities of the Member States in the European Economic Area.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) amended the Decision on the collaboration of the insurance supervisory authorities of the Member States in the European Economic Area.
  • Increased cross-border activities in the internal market and the growing internationalisation of business activities require a sound exchange of information and show that a strong, close and timely collaboration between insurance supervisory authorities is needed.
  • EIOPA will continue to monitor the implementation of the Decision and will use its supervisory convergence tools to ensure a consistent application across the European Union.
  • A cooperation platformis set up when EIOPA and relevant national supervisory authorities see the merit in strengthening cooperation in case of material cross-border business in order to enable a sound internal market in the European Union.

EIOPA publishes its Discussion Paper on the Methodological Framework for Stress-Testing IORPs

Retrieved on: 
Wednesday, June 23, 2021
European Insurance and Occupational Pensions Authority, European Union, Insurance regulation, Stress testing, Government, Pan-European Pension, Finance, Money, Own risk and solvency assessment

The European Insurance and Occupational Pensions Authority (EIOPA) published today its Discussion Paper on the Methodological Framework for Stress-Testing Institution for Occupational Retirement Provision (IORPs) for consultation with stakeholders.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) published today its Discussion Paper on the Methodological Framework for Stress-Testing Institution for Occupational Retirement Provision (IORPs) for consultation with stakeholders.
  • The public consultation of the methodological framework shall foster an active dialogue amongst supervisors, the sector, consumer associations and academics.
  • The methodological framework for stress-testing IORPs sets out theoretical and practical rules, guidance and possible approaches to support future IORP stress test exercises.
  • EIOPA invites stakeholders to provide their feedback on the discussion paper by responding to [email protected] 22 September 2021.

EIOPA issues Opinion on the supervision of the use of climate change risk scenarios in ORSA

Retrieved on: 
Saturday, April 24, 2021
Capital requirement, Financial risk management, Own risk and solvency assessment, Articles, Finance, Money, Orsa, European Insurance and Occupational Pensions Authority, Risk assessment, Insurance, Risk, Climate risk

The European Insurance and Occupational Pensions Authority (EIOPA) issued today an Opinion on the supervision of the use of climate change scenarios in the Own Risk and Solvency Assessment (ORSA) addressed to national supervisory authorities.

Key Points: 
  • The European Insurance and Occupational Pensions Authority (EIOPA) issued today an Opinion on the supervision of the use of climate change scenarios in the Own Risk and Solvency Assessment (ORSA) addressed to national supervisory authorities.
  • In this Opinion EIOPA sets out expectations on the supervision of the integration of climate change risk scenarios by insurers in their ORSA.
  • However, only a minority of insurers assess climate change risks in the ORSA using scenario analysis, usually limited to a short-term time horizon.
  • In the ORSA, insurers should do an assessment to identify material climate change risk exposures and subject the material exposures to a risk assessment.