Featured Product

    ESRB Report on Recovery and Resolution Framework for Insurers

    August 17, 2017

    ESRB published a report on recovery and resolution framework for EU insurers, from a macro-prudential perspective. This report, which covers both primary insurers and reinsurers, discusses the need for comprehensive recovery and resolution policies to complement supervisory and macro-prudential policies; identifies and describes a number of potential recovery and resolution tools; highlights funding aspects of the resolution process; and considers cross-sectoral and cross-border implications and contagion channels that arise when resolution tools are applied.

    The report finds that the contribution of the insurance sector to systemic risk has increased since the financial crisis. Thus, the regular insolvency procedure might be unable to manage a failure in the EU insurance sector in an orderly fashion. A broad set of tools, in addition to those related to insolvency proceedings, may enable authorities to be better prepared to deal with situations involving the distress and default of insurers. The report reveals that an EU-wide policy strategy addressing risks related to the insurance sector is lacking. Filling this regulatory gap will require a broad range of stakeholders in Europe to work together, including EU and national legislators, EIOPA, macro-prudential authorities, and micro-prudential regulators. The report advocates the development of a harmonized effective recovery and resolution framework for insurers across the EU, including the following:

    Existing recovery and resolution frameworks should be evaluated and, if appropriate, enhanced and harmonized at the EU level. Furthermore, efforts should be made to ensure their consistent implementation.

    The existing recovery and resolution toolkit should be expanded and should include giving resolution authorities the power to modify the terms of existing contracts as a measure of last resort and subject to adequate safeguards (as per the majority of ESRB member institutions).

    The recovery and resolution framework should cover the whole insurance sector, while allowing for proportionality.

    The financial stability objectives of the framework should be recognized and the interactions of the resolution authority with the macro-prudential authorities should also be clarified.

    Work on recovery and resolution frameworks should go hand-in-hand with a discussion of how resolution should be funded.

    Related Link: Report (PDF)
    Keywords: Europe, EU, Insurance, Recovery and Resolution Framework, Solvency II, Report, ESRB

    Featured Experts
    Related Articles
    News

    FSB Publishes List of Global Systemically Important Banks for 2019

    FSB published the 2019 list of global systemically important banks (G-SIBs), using the end-2018 data and an assessment methodology designed by BCBS.

    November 22, 2019 WebPage Regulatory News
    News

    EBA Publishes Roadmap on Risk Reduction Measures Package

    EBA published a set of roadmaps outlining the approach and timelines for delivering the mandates stemming from the Risk Reduction Measures Package adopted by the European Council and European Parliament on May 20, 2019.

    November 21, 2019 WebPage Regulatory News
    News

    EBA Consults on Initial Reporting Requirements for Market Risk

    EBA launched a consultation on the implementing technical standards on supervisory reporting requirements for market risk.

    November 21, 2019 WebPage Regulatory News
    News

    FED Proposes to Extend Initial Compliance Dates Under SCCL Rule

    FED published a proposal to extend, by 18 months, the initial compliance dates for foreign banks subject to the single-counterparty credit limit (SCCL) rule.

    November 20, 2019 WebPage Regulatory News
    News

    CBIRC to Strengthen Supervisory and Policy Support for SME Services

    CBIRC released a notification on strengthening supervision and guidance to enhance the quality and efficiency of financial services for "small and micro-enterprises" (SMEs).

    November 20, 2019 WebPage Regulatory News
    News

    FED Adopts Proposal to Implement Reporting Form for SCCL

    FED adopted a proposal to implement the Single-Counterparty Credit Limits (SCCL) reporting form FR 2590.

    November 20, 2019 WebPage Regulatory News
    News

    APRA Publishes Approach to Regulating and Supervising GCRA Risks

    APRA published an information paper that sets out a more intensive regulatory approach to transform governance, culture, remuneration, and accountability (GCRA) practices across the prudentially regulated financial sector.

    November 19, 2019 WebPage Regulatory News
    News

    US Agencies Update Rule on Derivative Contracts Exposure Calculation

    US Agencies (FDIC, FED, and OCC) announced a final rule updating the way certain banking organizations are required to measure counterparty credit risk for derivative contracts under their regulatory capital rules.

    November 19, 2019 WebPage Regulatory News
    News

    US Agencies Finalize Rule to Amend Treatment of HVCRE Exposures

    US Agencies (FDIC, FED, and OCC) finalized a rule to modify the treatment of high volatility commercial real estate (HVCRE) exposures, as required by the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

    November 19, 2019 WebPage Regulatory News
    News

    US Agencies Finalize Changes to Rule on Supplementary Leverage Ratio

    US Agencies (FDIC, FED, and OCC) finalized changes to the capital requirement for banking organizations predominantly engaged in custodial activities, as required by the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

    November 19, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4177