EIOPA on Use of Limitations and Exemptions Under Solvency II Reporting
EIOPA published the third annual report on the use of exemptions and limitations from the regular supervisory reporting in 2017 and the first quarter of 2018 by national competent authorities under Solvency II. The report describes the data sources used for the analysis and examines the process for granting limitations and/or exemptions from reporting templates, the quarterly exemptions for solo undertakings, the proportionality principle in quarterly reporting, and the process for granting limitations regarding the reporting of credit rating information.
The report addresses the proportionality principle on reporting requirements, from which the limitations and exemptions on reporting—as foreseen in Article 35 of the Solvency II Directive—are just one of the existing proportionality tools. Reporting requirements also reflect a natural embedded proportionality. In addition, the risk-based thresholds were included in the implementing technical standard on reporting. The quantitative information is obtained from the reporting templates Solvency Capital Requirement (SCR) Own Funds template (S.23.01), Gross Written Premiums (GWP) from the Premiums, claims, and expenses by line of business template (S.05.01), technical provisions from the Balance sheet template (S.02.01), and Total assets from the Balance sheet template (S.02.01).
The report presents two different examples for quarterly templates that give evidence that the different tools used to apply proportionality in reporting complement each other and result in a proportionate and risk-based approach. In the cases presented, only 26% and 23% of the undertakings, for derivatives and look-through templates respectively, reported the templates quarterly. Additionally, the report highlights that about 27% of the undertakings are allowed a limited quarterly reporting, with the market share of such undertakings varying between 0% and 14.6% for non-life Gross Written Premiums and between 0% and 4.5% for life Technical Premiums. At the country level, the top three countries allowing exemptions by number of undertakings are Luxembourg, France, and Norway (with 70%, 67%, and 64%, respectively). However, a different picture emerges when looking at the exemptions in terms of total assets, wherein Liechtenstein ranks highest, followed by Malta and France (with 7.1%, 6.5%, and 5.4%, respectively).
Related Links
Keywords: Europe, EU, Insurance, Solvency II, Reporting, Limitations and Exemptions, Proportionality, EIOPA
Featured Experts
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
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.
Previous Article
EIOPA Publishes Report on Use of Capital Add-Ons Under Solvency IIRelated Articles
ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA Provides Opinion on Definition of Credit Institution in CRR
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA Consults on Alignment of Daily Liquidity Report for Banks
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED Releases Scenarios for Second Round of Stress Tests on Banks
FED released hypothetical scenarios for a second round of stress tests for banks.
PRA Announces Update on Supervisory Benchmarking Portfolio Exercise
PRA published updates in relation to the 2021 Supervisory Benchmarking Portfolio exercise.
FED Revises and Extends Capital Assessment and Stress Testing Reports
FED adopted a proposal to extend for three years, with revision, the capital assessments and stress testing reports (FR Y-14A/Q/M; OMB No. 7100-0341).
HKMA Updates Policy Module for Non-Centrally Cleared OTC Derivatives
HKMA revised the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.
EBA Updates List of Validation Rules for Reporting by Banks
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS Advocates Environmental Risk Analysis for Financial Sector
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
