Featured Product

    EIOPA Consults on Methodological Principles for Insurer Stress Testing

    July 22, 2019

    EIOPA published a discussion paper on the methodological principles for stress testing the insurance sector in EU. The discussion paper sets out methodological principles and guidelines required for the conduct and assessment of an EU-wide insurance stress test exercise. In this paper, the key elements addressed by EIOPA include stress test process and objectives, scope of stress tests, scenario design of a stress test, shocks and their application in a stress test, and data collection and validation. The comment due date for this discussion paper is October 18, 2019.

    In a supervisory bottom-up stress test, which is an exercise run by a supervisor or a regulatory authority, participating institutions are requested to calculate the impact of the prescribed shocks on their balance sheet and capital requirements, according to the provided guidance and by using their own models. The principles and guidelines set out in this discussion paper will be the toolbox to facilitate both the design and execution phase of the future EIOPA stress test exercises. The discussion paper is part of a broader process to enhance the stress testing framework. In this context, EIOPA will work on other related issues such as the assessment of liquidity positions under adverse scenarios, assessment of the vulnerabilities toward climate-related risks, and the potential approaches to multi-period stress tests.

    EIOPA is required to conduct regular EU-wide stress test exercises for the insurance sector, in collaboration with ESRB. As part of the regular stress testing exercise, EIOPA is tasked with developing common methodologies for assessing the effect of adverse economic and financial scenarios on the insurance sector in EU, for application by national competent authorities. For each exercise, EIOPA can tailor specific elements of stress testing according to the market conditions and their potential negative implications for insurers. This paper is part of a general enhancement of the EIOPA approach to stress testing from a methodological and operational standpoint. Additionally, a reduction in the frequency of the EU-wide stress test exercises is under consideration, to allow proper follow-up analyses of the stress test results and to better develop and follow-up on the recommendations issued. 

     

    Related Links

    Comment Due Date: October 18, 2019

    Keywords: Europe, EU, Insurance, Stress testing, Methodological Principles, Solvency II, Systemic Risk, EIOPA

    Featured Experts
    Related Articles
    News

    OSFI Outlines Prudential Policy Priorities for Coming Months

    OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BIS Announces TechSprint on Innovative Green Finance Solutions

    Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.

    May 06, 2021 WebPage Regulatory News
    News

    EBA Proposed Regulatory Standards for Central Database on AML/CFT

    EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ECB Responds to EC Consultation on Crisis Management Framework

    ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ACPR Publishes Version 1.0.0 of RUBA Taxonomy

    ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls

    BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.

    May 05, 2021 WebPage Regulatory News
    News

    ECB Amends Decision on TLTRO III

    ECB published Decision 2021/752 to amend Decision 2019/1311 on the third series of targeted longer-term refinancing operations or TLTRO III.

    May 05, 2021 WebPage Regulatory News
    News

    Central Bank of Ireland Issues Draft Template for AnaCredit Reporting

    The Central Bank of Ireland published Version 2.7 of the draft credit data template and rules for monthly AnaCredit reporting by banks.

    May 05, 2021 WebPage Regulatory News
    News

    OSFI Consults on Revisions to BCAR and Leverage Requirements Returns

    OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.

    May 04, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Revisions to Nonperforming Loan Data Templates

    EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.

    May 04, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6936