Due to the outbreak of COVID-19, EIOPA is re-prioritizing and alleviating the burden by extending the deadlines or delaying projects where input from national competent authorities and/or industry is foreseen. EIOPA is extending the comments deadline of certain consultations, delaying publication of comments of some discussion notes or papers, and postponing the data requests planned in the first and second quarters of the year. Additionally, EIOPA has published a statement on dividend distribution and variable remuneration policies of insurers in the context of COVID-19.
As the capacity of financial institutions to respond to EIOPA consultation papers or calls for evidence is supposed to be affected by the current situation, it is proposed that the consultation period be extended in relation to the consultations that are open to the market. Details of the new consultation period end-dates and delays in publication of comments are as follows:
- Review of technical implementation means for the package on Solvency II Supervisory Reporting and Public Disclosure—Comments deadline is extended by six weeks from April 20, 2020 to June 01, 2020
- Consultation on Pan-European Personal Pension Product (PEPP) Implementing Technical Standards—Comments deadline is extended by four weeks from May 20, 2020 to June 17, 2020
- Consultation on discussion paper on ongoing changes to the new benchmark rates (or IBOR transitions)—Comments deadline is extended by nine weeks from April 30 to June 30, 2020
- Market and Credit Risk Comparative Study—Information request deadline is extended by five weeks from May 31, 2020 to July 03, 2020
- Discussion Note on value-chain/Insurtech—Publication for comments delayed to a date to be determined.
- Second discussion paper on methodological principles of insurance stress testing—Publication for public comments delayed to a date to be determined.
EIOPA also presented the list of data requests that have been postponed:
- It was planned in an event not to carry out, this year, the long-term guarantees measures (LTG) review information request to undertakings. The information request to the national competent authorities will likely be postponed from the second quarter to the third quarter of the year.
- With respect to the climate-risk sensitivity analysis 2020, data request to complete data available for top-down element and qualitative survey to large insurers as agreed in the roadmap for the 2020 exercise on climate-related transition risks will be cancelled. The report will be performed with the available information.
- Data collection for the work on the impact of ultra low yields on insurers to complement the Solvency II data planned for first/second quarter will be launched later to also incorporate COVID-19 reflections, if necessary.
In its statement on dividends distribution and variable remuneration policies, EIOPA urges (re)insurers to temporarily suspend all discretionary dividend distributions and share buybacks aimed at remunerating shareholders. This prudent approach should also be applicable to the variable remuneration policies. Insurers and reinsurers are expected to review their current remuneration policies, practices, and rewards to ensure that they reflect prudent capital planning and are consistent with, and reflective of, the current economic situation. This statement builds on the EIOPA statement from March 17, 2020, which stressed the importance of insurers preserving their capital position in balance with the protection of the insured, following prudent dividend and other distribution policies, including variable remuneration.
- Press Release on Extending Consultation Deadlines
- Press Release on Dividend Distribution
- Statement on Dividend Distribution and Remuneration Policies
Keywords: Europe, EU, Insurance, COVID-19, Deadline Extension, Reporting, Reinsurance, Solvency II, Disclosures, Insurtech, Market Risk, Credit Risk, IBOR Transition, Climate Change Risk, EIOPA
Previous ArticlePRA Outlines Approach to Reporting and Disclosures Amid COVID-19
Next ArticleESMA Updates Risk Assessment in Light of COVID-19
EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.
The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.
EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.
EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.
EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.
MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.