EU Issues SII Corrigendum; EIOPA Assesses SII Reporting Exemptions
EU published, in the Official Journal of the European Union, a corrigendum to the Delegated Regulation 2015/35, which supplements Solvency II Directive (2009/138/EC). The corrigendum corrects the text in Annex XVII on method-specific data requirements and method specifications for undertaking specific parameters of the standard formula. In particular, the correction has been made to one of the assumptions specified for the method-specific data requirements of Section C of Annex XVII. Additionally, the European Insurance and Occupational Pensions Authority (EIOPA) published the annual report analyzing the use of limitations and exemptions from reporting under Solvency II during 2020 and the first quarter of 2021.
For solo undertakings, the limitations and exemptions foreseen in Article 35 of the Solvency II Directive are:
- Limitation—undertakings can be authorized to submit quarterly reporting information of reduced scope, where this information is reported at least annually. Any template, except for the minimum capital requirement, can be subject to a limitation.
- Exemptions—undertakings may be exempted from both quarterly and annual reporting in case of reporting templates on an item-by-item basis when some conditions are met.
The limitation to regular supervisory reporting is to be granted only to undertakings that do not represent more than 20% of a member state's life, non-life insurance, and reinsurance market respectively, where the non-life and reinsurance market share is based on gross written premiums and the life market share is based on gross technical provisions. Undertakings reporting information on their list of assets (S.06.02) and their open derivatives (S.08.01) may be exempted from reporting of credit rating information when some conditions are met. The EIOPA annual report on use of limitation and exemptions is based on the Solvency II quantitative reporting templates with reference date 2020 year-end and first quarter of 2021, as submitted to EIOPA by solo undertakings or insurance groups from the EEA, including the comparison with last year’s report.
The report highlights that, during 2020, three national competent authorities granted limitations and exemptions from reporting to 113 solo undertakings, while, during the first quarter of 2021, 11 national competent authorities granted limitations to 669 solo undertakings. At group level, two national competent authorities granted limitations and exemptions from annual reporting to seven groups during 2020 and two national competent authorities granted exemptions to 27 groups for the quarterly reporting for the first quarter 2021. In the first quarter of 2021, large undertakings completed about 10 templates while on average five were submitted by smaller ones. Furthermore, regarding annual reporting, the ten largest undertakings by total assets completed on average almost 37 templates, while the ten smallest undertakings completed only 28 templates. The results show that proportionality is implemented in the reporting and reflects the nature, scale, and complexity of the risks inherent to the business. The average number of templates submitted by small, medium-size, or large insurance undertakings varies substantially, which reflects that the proportionality embedded in the design of reporting requirements delivers a good result.
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Keywords: Europe, EU, Insurance, Reinsurance, Solvency II, Corrigendum, Limitations, Exemptions, Reporting, EC, EIOPA
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