Featured Product

    EIOPA Studies Use of Limitations/Exemptions from Solvency II Reporting

    January 28, 2020

    EIOPA published annual report on the use of exemptions and limitations from the regular supervisory reporting during 2018 and the first quarter of 2019 by the national competent authorities under Solvency II. The report addresses the issue of proportionality of reporting requirements. The limitations and exemptions set out in Article 35 of the Solvency II Directive are a concrete proportionality measure in reporting requirements, but should not be seen as the only proportionality measure. The EIOPA survey finds that the market share of undertakings that are allowed limited quarterly reporting is far from the 20% market share allowable under the Solvency II Directive.

    To evidence how proportionality is implemented in quarterly reporting, reflecting the nature, scale, and complexity of the risks inherent to the business, this report uses two examples. These examples are the look-through reporting of collective investment undertakings for unit-linked contracts and the number of templates used by different-sized companies. The report shows that 13 competent authorities granted limitations to 838 solo undertakings for first quarterly reporting in 2019 (compared to 791 solo undertakings in the first quarter of 2018) while 5 national authorities (5 in 2017) granted limitations and exemptions from reporting using item-by-item templates to 136 solo undertakings for annual reporting in 2018 (139 in 2017).

    With regard to the number of templates provided by small, medium-size, or large insurance undertakings, more quarterly information is required from large undertakings, which need to fill in on average nine templates, nearly twice as many templates as small undertakings, which had to fill in five templates on average. In  case of annual reporting, the 10 largest undertakings by total assets have to complete 36 templates as opposed to the 26 templates completed by the 10 smallest undertakings. Overall, this suggests that proportionality is embedded more in quarterly reporting than in annual reporting and, therefore, additional risk-based thresholds are needed (as to be proposed by EIOPA in the 2020 review). 

    This report is based on information submitted to EIOPA by national competent authorities via the quantitative reporting templates and an additional survey. The information covers exemptions from solo and group annual reporting, limitations on both solo and group quarterly 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 survey was conducted by EIOPA among national supervisors from the 31 European Economic Area members, including the EU member states, on the usage of limitations and exemptions. EIOPA received answers from all national supervisors, with the majority of national competent authorities in this survey confirming that they grant exemptions on a case-by-case basis.

     

    Related Links

    Keywords: Europe, EU, Insurance, Solvency II, Limitations and Exemptions, Reporting, Proportionality, EIOPA

    Featured Experts
    Related Articles
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    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

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116