Featured Product

    EIOPA Outlines Strategic Supervisory Priorities for Insurance Sector

    February 19, 2021

    EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities. As part of this, EIOPA expects national competent authorities to focus their supervisory activities on monitoring the impact of the prolonged low-yield environment as well as of the COVID-19 crisis on the business model sustainability and development of insurers. EIOPA also expects the national competent authorities to monitor the impact of emerging trends and risks on insurer business models as well as on the future solvency capital and liquidity needs, combined with capital-generation capabilities in medium to long term.

    In this context, additional EIOPA expectations for the competent authorities include a consideration of the:

    • Potential spillover of risks coming from the interconnectedness of insurers with banks as well as potential spillovers form the sectors of the real economy.
    • Enhanced market monitoring of low interest rate via stress tests. The insurance stress tests for 2021 will include liquidity risk component and consider the adverse unwinding of the COVID-19 crisis such as a slower than planned recovery of the economy or double-dip evolutions (the narrative and shocks have been developed in cooperation with ESRB). 
    • Forward-looking risk assessment insurers perform in their Own Risk Solvency Assessment, or ORSA, process as well as the measures insurers take to preserve their capital position in balance with the protection of the policyholders.
    • Direction of the future transformation amid the ongoing turmoil that is likely to accelerate emerging trends in industry, especially in the area of digitalization, sustainability, new insurance products and services, or product transformations (for example, simplification of products, simplification of the product portfolio, structural changes in the products portfolio). For consideration, EIOPA also highlighted that digitalization is raising significant risks and opportunities from a supervisory perspective.

    Under the revised EIOPA Regulation, EIOPA is required to identify, at least every three years, by March 31, up to two priorities of Union-wide relevance, which shall reflect future developments and trends. National competent authorities shall take those priorities into account when drawing up their work programs and shall notify EIOPA accordingly. EIOPA shall discuss possible follow-up, which may include guidelines, recommendations to national competent authorities, and peer reviews in the respective area. The priorities of Union-wide relevance identified by EIOPA shall not prevent national competent authorities from applying their best practices and acting on their additional priorities and developments.

     

    Related Links

    Keywords: Europe, EU, Insurance, Supervisory Priorities, Solvency II, Stress Testing, COVID-19, Liquidity Risk, ORSA EIOPA

    Featured Experts
    Related Articles
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    MAS Amends Notices on Risk-Based Capital Adequacy Requirements

    MAS revised Notices 637 and 1111 on the risk-based capital adequacy requirements, along with Notice 656 on the exposures to single counterparty groups for banks incorporated in Singapore.

    June 14, 2021 WebPage Regulatory News
    News

    ISDA Consults on Implementation of Fallbacks for Certain Swap Rates

    ISDA is consulting on the implementation of fallbacks for the sterling LIBOR ICE Swap Rate and for the USD LIBOR ICE Swap Rate.

    June 11, 2021 WebPage Regulatory News
    News

    US Agencies Set Out Unified Agenda for Planned Regulatory Actions

    SEC announced that the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions.

    June 11, 2021 WebPage Regulatory News
    News

    BIS and BoE Launch Innovation Hub in London

    BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.

    June 11, 2021 WebPage Regulatory News
    News

    ESRB Recommends Reciprocation of Certain Macroprudential Measures

    ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.

    June 11, 2021 WebPage Regulatory News
    News

    MAS Amends Regulatory Notices Applicable to Banks in Singapore

    MAS revised multiple notices that are applicable to banks and merchant banks in Singapore and have been issued pursuant to the Banking Act (Cap 19).

    June 11, 2021 WebPage Regulatory News
    News

    EC Publishes Regulation on Key Aspects of Implementation of SA-CCR

    EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.

    June 10, 2021 WebPage Regulatory News
    News

    BCBS Consults on Prudential Treatment of Cryptoasset Exposures

    BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.

    June 10, 2021 WebPage Regulatory News
    News

    EBA Revises List of Validation Rules for Reporting

    EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.

    June 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7097