Featured Product

    EIOPA Supports ESRB Views on Liquidity Risk Monitoring for Insurers

    June 09, 2020

    EIOPA issued a statement supporting views of ESRB on the importance of improving the monitoring of liquidity risks in the insurance sector. Earlier, in a letter addressed to the EIOPA Chair, ESRB strongly encouraged EIOPA and its members to promptly finalize and operationalize the framework for monitoring of liquidity risks in the insurance sector. In its statement, EIOPA highlights that, as a response to COVID-19 crisis, it has already developed and put in place a proportionate framework to enhance the nature and the consistency of the information collected on liquidity risks. Until now, there is no evidence of the materialization of liquidity risks in the insurance sector.

    The ESRB letter, states that, to date, there has been a lack of consistent data for assessing the magnitude of potential liquidity risks in the insurance sector and the related financial stability risks. Therefore, supervisors may not be in a position to judge with confidence the scale of potential liquidity pressures in the future and the potential financial stability implications of a crystallization of such liquidity risks. In the past, ESRB has flagged that the Solvency II review presents an opportunity to better enable supervisors to address liquidity risk of insurers with a vulnerable liquidity profile. Additionally, ESRB judges that, in the near term, priority should be given to improved monitoring of liquidity risks in the insurance sector, to enhance Europe’s preparedness to respond to potential future shocks that could lead to a deterioration in financial stability conditions.

    In response, this recent statement from EIOPA clarifies that, as part of the Solvency II Review, EIOPA has consulted on concrete proposals to reinforce the macro-prudential dimension of the regime; this includes elements to strengthen the tools available to assess and monitor liquidity risks. The proposals will be assessed in the coming months in face of the COVID-19 evidence. The statement adds that EIOPA will continue to contribute to the ESRB work to support the stability of the insurance sector and its contribution to the overall stability of the financial system. 

     

    Related Links

    Keywords: Europe, EU, Insurance, Solvency II, Liquidity Risk, Financial Stability, COVID-19, Solvency II Review, ESRB, EIOPA

    Featured Experts
    Related Articles
    News

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    July 08, 2020 WebPage Regulatory News
    News

    PRA Statement on Application of Matching Adjustment Amid Crisis

    PRA published a statement to insurers that clarifies the approach to application of the matching adjustment during COVID-19 crisis.

    July 07, 2020 WebPage Regulatory News
    News

    EBA Provides Clarity on Implementation of Certain COVID-19 Policies

    EBA published a report on the implementation of selected COVID-19 policies within the prudential framework for banking sector.

    July 07, 2020 WebPage Regulatory News
    News

    EC Consults on Revision of Network and Information Systems Directive

    EC launched a consultation to revise the network and information systems (NIS) Directive (2016/1148), which was adopted in July 2016 and is the first horizontal internal market instrument aimed at improving the resilience of the EU against cybersecurity risks.

    July 07, 2020 WebPage Regulatory News
    News

    PRA Statement on LIBOR Transition and PRA Resolution-Related Rules

    PRA published a statement that outlines its view on the implications of LIBOR transition for contracts in scope of the “Contractual Recognition of Bail-In” and “Stay in Resolution” parts of the PRA Rulebook.

    July 07, 2020 WebPage Regulatory News
    News

    PRA Issues Updates to Pillar 2A Capital Framework in UK

    PRA published the policy statement PS15/20 to reflect additional resilience associated with higher macro-prudential buffers in a standard risk environment with a reduction in Pillar 2A capital requirements.

    July 06, 2020 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.

    July 06, 2020 WebPage Regulatory News
    News

    FCA Proposes Guidance to Further Support Consumer Credit Customers

    FCA announced proposals that would provide continued support for certain consumer credit products to users, who are facing a financial impact because of the exceptional circumstances arising from the COVID-19 pandemic.

    July 03, 2020 WebPage Regulatory News
    News

    ACPR Publishes Draft of Taxonomy RAN 1.4.0 for Solvency II Reporting

    ACPR published a draft version of taxonomy RAN 1.4.0_PWD1, along with the related documentation, for Solvency II reporting.

    July 03, 2020 WebPage Regulatory News
    News

    BCBS Amends Guidelines on Sound Management of AML/CFT Risks

    BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).

    July 02, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5445