EIOPA published a paper that sets out the strategic approach to a comprehensive risk-based and preventive framework for conduct of business supervision on a European level. For supervision in this context, EIOPA plans to rely as much as possible on available data. If needed, EIOPA will target a streamlined process, for data collection to avoid multiple data collections within a short timeframe, and make use of data that is already or will be available on a regular basis (for example, under the Solvency II reporting framework for lines of business level information). EIOPA also published a supervisory statement on the Own Risk and Solvency Assessment (ORSA) in the context of COVID-19 pandemic. The statement is accompanied with the resolution of comments from the public consultation, the feedback statement to stakeholders and the impact assessment that was developed based on the input provided during the consultation period.
The aim of the supervisory statement on ORSA is to promote supervisory convergence, to focus on supervision of the internal processes of undertakings (as necessary for a good quality ORSA), and to guide undertakings through supervisory expectations under the situation triggered by the COVID-19 pandemic. EIOPA expects that most of the undertakings have captured the impact of the pandemic in their ORSA by now, as some national supervisory authorities have already issued guidance to reflect the pandemic situation in the ORSA. This statement guides undertakings through supervisory expectations under the current situation caused by the COVID-19 pandemic, while considering that the impact on each undertaking can differ, depending on its risk profile. The statement addresses the pandemic situation, though the recommendations therein are applicable to any similar situation with the necessary adaptations. ORSA is a risk management tool that sets out the principles of forward-looking self-assessment of risk management and solvency for insurers and reinsurers. The performance of an ORSA under the current circumstances is intended to give insight into the potential impact of the COVID-19 pandemic on the undertaking’s risk profile to support the decision making by their administrative, management, or supervisory body (AMSB). In addition, it promotes the identification and effective management of the undertakings’ risks to ensure they have sufficient capital to absorb possible losses and help steer their business through periods of adversity. ORSA is relevant for undertakings that are within the scope of Solvency II.
- News Release on Business Conduct Strategy
- Business Conduct Supervision Strategy (PDF)
- News Release on ORSA
- Supervisory Statement on ORSA (PDF)
- Resolution of Comments (PDF)
- Feedback Statement (PDF)
- Impact Assessment (PDF)
Keywords: Europe, EU, Insurance, Solvency II, ORSA, Supervisory Convergence, Conduct Risk, Solvency Capital Requirement, SCR, COVID-19, EIOPA
Previous ArticleEBA Publishes Methodological Guide to Mystery Shopping
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.
The Australian Prudential Regulation Authority (APRA) updated the list of authorized deposit-taking institutions, granting license to Barclays Bank PLC and Crédit Agricole Corporate and Investment Bank to operate as foreign authorized deposit-taking institutions under the Banking Act 1959.