EC Launches Consultation on Review of Solvency II Directive
EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020. The Solvency II Directive, which came into effect in 2016, sets out harmonized, risk-based rules across EU for insurance companies and promotes transparency, comparability, and competitiveness in the sector. To ensure that these rules are still fit for purpose, EC is comprehensively reviewing the prudential framework, building on the experience gained over the past few years. This review is also an opportunity to see how the insurance sector can contribute to the objectives of the European Green Deal and the Capital Markets Union, along with the overall efforts of EC to ensure the EU economic recovery following COVID-19 crisis. EC also published an impact assessment on the review of Solvency II.
In February 2019, EC had sent a formal request for advice to EIOPA. Following the request for advice, EIOPA conducted three technical consultations covering the 19 topics of the Solvency II review that were identified by EC. In parallel to the work of EIOPA on the review, EC intends to collect feedback from a wider audience, including policyholders, consumer associations, and financial market stakeholders, by conducting its own consultation on the review. This more general consultation covers four main areas:
- Long-termism and sustainability of insurer activities and priorities of the European framework
- Proportionality of the European framework and transparency toward the public
- Possibilities to improve citizens’ trust, to deepen the single market in insurance services and to enhance policyholder protection and financial stability
- New emerging risks and opportunities, such as climate and environment-related risks, digitalization and cyber risks, that may need to be addressed by the European framework
The results of the present consultation will complement the one resulting from technical consultations of EIOPA. They will all feed into the EC review process of the Solvency II framework. On the basis of feedback received, EC will come forward with a legislative proposal in the Summer of 2021.
Related Links
Comment Due Date: October 21, 2020
Keywords: Europe, EU, Insurance, Reinsurance, Solvency II, European Green Deal, COVID-19, Digitalization, Climate Change Risk, ESG, EC, EIOPA
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Previous Article
ECB Consults on Supervisory Approach to Consolidation in BankingRelated Articles
BoE Seeks Information Before Migrating Statistical Reporting to BEEDS
The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.
FCA Publishes Final Rules on Investment Firms Prudential Regime
The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID).
CFRF Publishes Guides to Manage Financial Risks from Climate Change
The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.
PRA Finalizes Policy for Non-Performing Exposure Securitizations
The Prudential Regulation Authority (PRA) published the final Policy Statement PS24/21 that contains the new Non-Performing Exposures Securitization Part of the PRA Rulebook and an updated Supervisory Statement SS10/18 on the general requirements and capital framework with respect to securitizations.
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
EU to Explore Potential of Establishing a Joint Cyber Unit
The European Council adopted conclusions inviting the European Union (EU) and the member states to further develop the cybersecurity crisis management framework.
EC Sets Out Work Program for 2022
The European Commission (EC) adopted the work program for 2022.
