EC Sets Out Updated Technical Information for Solvency II Calculations
EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds. This technical information is relevant for reporting with reference dates from June 30, 2020 to September 29, 2020, in accordance with the Solvency II Directive. This regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
Insurance and reinsurance undertakings shall use the technical information in this regulation when calculating technical provisions and basic own funds for reporting with reference dates from June 30, 2020 until September 29, 2020. For each relevant currency, the technical information used to calculate the best estimate in accordance with Article 77 of Solvency II Directive (2009/138/EC), the matching adjustment in accordance with Article 77c of that Directive, and the volatility adjustment in accordance with Article 77d of that Directive shall be the following:
- The relevant risk-free rate term structures, as set out in Annex I
- The fundamental spreads for calculation of the matching adjustment, as set out in Annex II
- The volatility adjustments for each relevant national insurance market, as set out in Annex III
On July 03, 2020, EIOPA provided EC with the technical information related to end of June 2020 market data. Given the need for the immediate availability of the technical information, it is important that this regulation enters into force as a matter of urgency. For prudential reasons, it is necessary that insurance and reinsurance undertakings use the same technical information for calculating technical provisions and basic own funds, irrespective of the date on which they report to their competent authorities. This regulation should, therefore, apply from the first reporting reference date (that is, June 30, 2020) to which this regulation applies.
Related Links
Effective Date: August 04, 2020
Keywords: Europe, EU, Insurance Solvency II, Reporting, Basic Own Funds, Volatility Adjustment, Matching Adjustment, Technical Provisions, Regulation 2020/1145
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
EBA Releases Erratum for Phase 2 Package on Reporting Framework 2.10Related Articles
FCA Consults on Regulation of International Firms in UK
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
MAS Amends Notice on Capital Adequacy Requirements of Banks
MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.
FCA to Begin to Move Firms to New Data Collection Platform RegData
FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.
APRA Reviews Repayment Deferral Plans, Identifies Best Practices
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs Assess Risks to Financial Sector After COVID-19 Outbreak
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE Confirms Withdrawal of COVID Corporate Financing Facility
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
ESAs Launch Survey on Templates for Product Disclosures Under SFDR
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
EC Deems UK Framework for CCPs Temporarily Equivalent to EMIR Rules
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
EBA to Phase Out Guidelines on Loan Repayment Moratoria
EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.
