EIOPA published annual reports on the use of exemptions and limitations from the regular supervisory reporting and on the use of capital add-ons by national competent authorities. The report on Capital Add-Ons (CAOs) is published for the first time. The report on exemptions and limitations covers reporting on exemptions for the whole of 2016 and on limitations for the first quarter of 2017.
Insurance and reinsurance undertakings are subject to annual and quarterly reporting. According to the Solvency II Directive, national competent authorities can exempt or limit the submission of the quantitative reporting templates (QRTs), based on criteria such as a defined threshold of the life and non-life market shares in a country, or the size of an undertaking. The report on exemptions and limitations shows that the exemptions from annual reporting concern 134 undertakings and 8 groups while limitations from quarterly reporting concern 703 undertakings and 21 groups. Twenty-one national competent authorities have not authorized any undertaking to use exemptions or limitations, as many of them were planning to collect at least a complete set of annual reporting before taking a decision on the limitations or exemptions. The market share of undertakings benefiting from limitations stays below the maximum of 20% set in the Solvency II Directive.
As at year-end 2016, four member states had imposed 20 CAOs at individual undertaking level and one member state had imposed 4 CAOs at group level. Most CAOs are related to cases where the risk profile of the undertaking deviated significantly from the assumptions underlying the Solvency Capital Requirement calculated under the standard formula. The CAOs set vary from 2% to 85% as part of the total Solvency Capital Requirement of the undertaking. Twenty-two member states implemented a regulation to make use of the option not to disclose capital add-ons for a transitional period.
Related Link: News Release
Previous ArticleEC Vice President on Sustainable Finance and Capital Markets Union
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.
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.
ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.
BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.
BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.
APRA published the updated reporting standards and guidance for the collection of Economic and Financial Statistics (EFS), following a consultation process. Also published was a response letter to the feedback received on the proposal for amending the EFS reporting standards and guidance.
EC is consulting on a draft delegated regulation to supplement the Taxonomy Regulation (2020/852) by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as environmentally sustainable.
The IFRS Foundation published material highlighting the ways in which existing requirements in IFRS standards require companies to consider climate-related matters when their effect is material to the financial statements.
FSB published a progress report on the implementation of reforms to major interest rate benchmarks, including the London Inter-bank Offered Rate (LIBOR) benchmark.